Practical Pointers for Land Trusts

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Practical Pointers for Land Trusts When Facing a Lawsuit or Other Legal Challenge of Any Size Practical Pointers for Land Trusts When Facing a Lawsuit or Other Legal Challenge of Any Size

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ISBN: 978-0-943915-32-6

Cover photograph: Bird Walk on John Ross Trail, Goshen Land Trust, by Joyce Mowrey

PLEASE NOTE: This document presents a general discussion of legal issues provided by the Land Trust Alliance as a tool to help land trusts. It is not legal advice. Neither the Land Trust Alliance nor the Vermont Law School is able to provide legal advice to readers of this document, nor does either organization intend to provide legal advice through these materials. If your land trust requires legal advice or other expert assistance, please seek the services of competent, licensed professionals with expertise in the area of law at issue. Acknowledgments

Vermont Law School Land Use Institute Alice Baker, Land Use Institute Research Associate Mary Beth Blauser, Land Use Institute Research Associate Katherine Garvey, Land Use Institute L.L.M. Fellow Quincy Hansell, Land Use Institute Research Associate Todd Heine, Land Use Institute Research Associate Kirby Keeton, Land Use Institute Clinician Rebekah Smith, Land Use Institute Research Associate Kinvin Wroth, Land Use Institute Director

Land Trust Alliance Lorraine Barrett, Conservation Defense Coordinator Sylvia Bates, Director of Standards and Research Mary Burke, Online Learning and Curriculum Manager Renee Kivikko, Director of Education Leslie Ratley-Beach, Conservation Defense Director

Reviewers Nora Beck, Membership Manager, Tennessee Parks and Greenways Foundation Fran Cole, Board Member and President, Bear Yuba Land Trust (CA) Melanie Lockwood Herman, JD, Executive Director, Nonprofit Risk Management Center Kalen A. Kingsbury, Associate Director and General Counsel, Piedmont Land Conservancy (NC) Contents

introduction, 1

PART I: Managing Risks and the Costs of Litigation, 5

Identifying and Managing Risk, 5 Preparing to Manage Risk, 32 Maintaining Good Relationships, 37 Anticipating the Costs of Litigation, 45 PART II: Hiring and Working with an Attorney, 54

When to Hire an Attorney, 54 Finding the Right Attorney, 55 Interviewing Attorneys, 61 What to Expect, 65 Practical Pointers on Managing Attorneys, 67 Privileged Information, 68 Conflicting Legal Advice, 70 Multiple Representation Arrangements, 74 PART III: Managing a Legal Challenge, 76

Facing Litigation: Lessons from Land Trust Experience, 77 Steps in a Lawsuit, 81 After the Settlement or Trial, 111 conclusion, 113

Resources for Land Trust Lawyers, 115 Additional Resources, 117 Glossary, 121 INTRODUCTION

Responsibility

Your land trust’s most important responsibility is to uphold the conservation promises you made to supporters, landowners, the IRS and your community. Conservation easements are only paper and ink if your land trust does not honor their intent. As a property owner, a land trust is also responsible for making sure it defends its fee-owned properties from trespass, encroachment or other legal challenges. A land trust that fails to meet its obligations will risk losing future donations of land and money from community members who want their contributions to make a difference. Additionally, a land trust that does not vigilantly defend against situations that place conservation property at risk may be faced with an increase in the number and extent of challenges and violations as developers, landowners and others perceive laxity in the protection of conservation values and the public interest. In addition to losing the community’s trust and jeopardizing protected land, a land trust that fails to protect its easements may face the wrath of the Inter- nal Revenue Service. The IRS requires that all land trusts have the commitment and capacity to monitor and enforce their conservation easements forever. Many conservation tax attorneys interpret this requirement to mean that all violations, even technical ones, must be addressed in a manner proportional to the damage to conserved resources. Certainly the IRS has emphasized that a land trust’s willingness to enforce its conservation easements is an essential component of perpetuity under the federal tax code. Usually a proportional and

1 Introduction

appropriate response is something less than litigation and always more than ignoring even a small issue. Your land trust must have the resources and resolve to meet these challenges.

Preparedness

With protected land in the millions of acres and more land under easement transferring to successor landowners, violations will occur and land trusts must address all of them. Even the best-prepared land trust will eventually experience a major dispute that requires its personnel to exercise anger management and sound negotiation skills. As of 2011, land trusts experience an easement violation in approximately one out of every 20 easements, according to an analysis of the historical total number of reported violations.1 Recent events have demonstrated that even land trusts that hold land in fee will face legal challenges from adjacent property owners and those who have a political or financial motive for challenging conservation groups. Your land trust should assume that you will need to address some type of a challenge every year. Addressing violations, upholding permanence and defending against challenges need not be an embarrassment to anyone involved or necessarily a precur- sor to contentious relationships within the community if handled well. It is prudent for land trusts to prepare themselves to defend what they have worked so hard to protect. If your land trust has not yet faced a challenge, the first one might be intimidating, so it is best to prepare your land trust well in advance. While many violations can be addressed internally and handled expeditiously, some present greater challenges and may ultimately result in litigation. This toolbox will lead you through the steps involved in a legal challenge, so you understand the process before you have to face it with an easement or property

1. In 2005 the overall national violations rate was an estimated 5 percent, and in 1999 the rate was 7 percent, based on Land Trust Alliance census data. The 2010 census data show a rate between 5 and 6 percent for the years 2006–2010. These rates include all violations, even technical ones, to the extent that land trusts track and report violations to the Alliance. The Alliance believes that these rates are underreported because not all land trusts respond to the census. For those that do report, most do not track every violation and most do not have a comprehensive database, relying instead on staff and volunteer memories. However, based on those few organizations that do use a tracking system and track all violations, a 5 to 7 percent rate is a fair estimate.

2 Introduction

on the line. Part I presents the most common threats land trusts currently face—including easement violations—and offers both advice on managing these risks and tools your land trust can use to prevent, mitigate or resolve disputes. This section also includes summaries of actual cases, along with refer- ences to where you can find the full judicial opinion. Part I also provides information so that you can anticipate the costs of these challenges. Part II provides advice on when and how to hire an attorney and on managing a contract with an attorney. Part III offers strategies to prevent, mitigate or resolve disputes, describes litigation strategies and ends with lessons learned from land trusts that have experienced legal challenges. Additional resources, including publications and helpful links, can be found following Part III. This toolbox will help you build skills so that you are prepared to operate calmly, confidently, efficiently and effectively in the face of legal -chal lenges. Although this toolbox focuses primarily on the challenges of defending conservation easements, the litigation issues and strategies are applicable to fee-owned lands.

Purpose

The purpose of this toolbox is to help land trust board members, staff and volunteers to successfully manage challenges, disputes and litigation. Land trust personnel who lack formal legal training but who are looking for more information about managing risk and dealing with legal challenges in land conservation should be able to use it easily. The toolbox includes definitions of formal legal terminology so that the lessons are accessible to the reader without legal training (roll the cursor over these terms to see definitions). The toolbox also includes examples of conservation defense lawsuits. The examples are summarized for clarity and so that an educated layperson will be able to understand them. Where possible, each example has a cita- tion for those who wish to refer to the original legal text. For additional background on easement violations and legal defense, see chapter three of Managing Conservation Easements in Perpetuity. [http://learningcenter .lta.org/ltalrn/stewardship/managing_ces_in_perpetuity/] For numerous judicial opinions, articles, briefs and other conservation defense legal material, see

3 Introduction

the Conservation Defense Clearinghouse on The Learning Center. http://tlc[ .lta.org/clearinghouse] We have used the term managing risk instead of avoiding risk because the former refers to the broader process of being aware of and taking steps in response to risk or in response to existing circumstances. The only way to entirely avoid the risk of litigation and its cost would be (1) to never sue anyone and (2) to stop doing anything that might cause someone to sue you. Obviously, land trust work means those two options aren’t realistic. To fulfill their public service mission, land trust boards, employees and volunteers must manage these risks effectively by countering the threats of loss and leveraging the opportunities for gain. This toolbox will teach you to analyze and manage risk so that your land trust acts smartly as it implements its mission. And, when your land trust faces a legal challenge, your advance preparation will help you manage the process so that you can emerge stronger from the challenge and successfully keep the promise of perpetuity.

4 PART ONE Managing Risks and the Costs of Litigation

Identifying and Managing Risk

None of us knows what tomorrow will bring. Circumstances can change dramatically from one day to the next. Legal challenges can happen unexpect- edly and arise from risk — that is, from a measure of the possibility that the future may be surprisingly different (either much worse or much better) from what we expect it is today. Unpredictable events involving each of the four fundamental concerns of a land trust — its people, its property, its income and its reputation — may bring near disaster or great good fortune, depending on how the land trust responds. Land trusts accept significant risks in their day-to-day activities because they routinely engage in real estate transactions and contractual arrangements. These obligations carry great potential for dispute. The potential for a dispute to occur is not so much a matter of “if” but “when.” Because disputes are inevitable in situations like these, it is prudent for your land trust to take steps to reduce their frequency and severity. No matter how remote you think the possibility of a dispute may be, having a plan and adequate resources in place to address the possibility is smart. While implementing a risk management plan may not always help your land trust avoid problems altogether, it will enable you to tackle them with much less difficulty and avoid mission impairment. The first step in creating such a plan is to identify potential risks and develop policies and procedures to mitigate them. The most common areas of risk that land trusts face include:

5 MANAGING RISKS AND THE COSTS OF LITIGATION Identifying and Managing Risks

• Transactions (due diligence items, document preparation) • Land and easement stewardship (easement monitoring, violation strategies, easement amendments, property safety) • Community and landowner relations • Contracts • Other common areas of litigation (hazardous waste liability, Civil Rights Act/RICO/Unfair Trade Practices, SLAPP suits, unauthorized practice of law)

Key to managing all of these risks are a strong recordkeeping policy, imple- mented consistently by all land trust personnel, and a strategy for ensuring that the organization has the money it needs to cover the expense of legal challenges when necessary. The following sections include some common sources of risk, examples and risk management strategies.

Transactional Risks

Due Diligence Investigation A due diligence investigation is a comprehensive inquiry designed to provide a land trust with a clear understanding of the conservation value of the property, any existing hazards on the land and any encumbrances on the title. It is important that, for every land or easement transaction, you conduct a thorough due diligence investigation of the property prior to acquisition. For example, your land trust should ensure that it is negotiating with the legal owner of the property and that there are no liens, mortgages, leases, water rights or other encumbrances that may negatively affect the transaction. In addition to a title investigation, other due diligence steps may include obtaining a survey, conducting an environmental assessment, checking for severed mineral rights, checking for secondary mortgage market assignments, walking the land, talking with the landowner, neighbors and officials, checking your project selection criteria and acquiring an appraisal. Once you conduct a full investigation and decide whether to complete the transaction, you should ensure that you draft all documents clearly and concisely. Legal counsel with experience in real estate law should also approve each land or easement transaction prior to the land trust taking title.

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Example: A land trust sued a landowner, alleging that it had ownership of the property on the basis of a quitclaim deed, a mis-mapped deed and by adverse possession. The land trust had purchased the surrounding property in 1982 but later discovered that the deed was mis-mapped and possibly missing a small parcel. The land trust attempted to correct this error and thought it had purchased the remaining parcel through a quitclaim deed, but—due to an unrecorded executor sale—it had not purchased the quitclaim deed from the true owner. As a last resort, the land trust argued that the grantor had acquired title to the disputed parcel by adverse possession. The court dismissed the land trust’s complaint, holding that the quitclaim deed was worthless because the grantor had previously conveyed all her rights to the property; the mis-mapped deed was invalid due to the vagueness of the underlying deed; and adverse possession did not apply because the grantor never occu- pied the property under color of title (despite the appearance of having title, in reality there is no title or a vital defect in the title). Arguably, a more thorough investigation should have been made before the land trust acquired the quitclaim deed.2

Example: A land trust must exercise care when creating an easement map. The Vermont Land Trust (VLT) faced a legal challenge when a subsequent landowner conducted a timber harvest in accordance with a forest management plan prepared by a forester who had relied on VLT’s easement map.3 The landowner inadvertently cut trees on a neighboring property, whose boundary was inaccurately depicted on VLT’s map. The neighbor sued the landowner and the forester for timber trespass and sued VLT for negligence in preparing an inaccurate map. While the court found that the landowner

2. Shawangunk Conservancy v. Fink, 261 A.D. 2d 692 (1999). [http://tlc.lta.org/clearinghouse/ documents/34560] 3. Spaulding v. Howe, Docket No. 475-9-06 WRCV (Windsor Sup. Ct., Vt. Sept. 20, 2007) (unpublished). [http://tlc.lta.org/clearinghouse/documents/171]

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was liable for trespass, the court dismissed the negligence claim against VLT because VLT’s map included multiple disclaimers that the land trust’s map was not a survey and VLT did not intend for the public to use it as such. This case provides an important lesson for land trusts, which generate copious maps in the course of their operations. The disclaimer language on the map made this case very easy for the court to dismiss the claims against VLT, and it would behoove land trusts to include similar language on all maps that they prepare.

Preparation of Documents Organizations often prepare generic templates for common activities such as conservation easements or providing general tax information to donors. However, even when using templates, land trusts should seek legal advice for any changes to the template that occur when tailoring the templates to the specific transactions or when drafting other documents required for a transaction. Land trust templates should at least be reviewed by outside counsel prior to use, and new clauses reviewed, as well, if added to a template during negotiations on a specific transaction. Land trusts may face a legal challenge over avoidable ambiguities that create later disputes, or for failing to take reasonable precautions in preparing important documents or including necessary disclaimers. In addition to conservation easement drafting, land trusts often prepare contracts. The section on contract issues on page 21 contains numerous pointers that may also be beneficial when preparing transactional documents related to a conservation easement or fee acquisition.

Conservation Easement Drafting When drafting documents use consistent and unambiguous terms, and include a clear and well-thought-out statement of intent or purpose. For example, avoid terms such as large or small as those terms will mean different things to different people. Instead, use specific measurements. Anticipate and address issues that may arise as a result of changing conditions.

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Example: In 2007, the Windham Land Trust, located in Maine, brought a suit to enforce its conservation easement on an 85-acre parcel of land.4 Since 2004, the landowners had hosted two music festivals on an adjoining unrestricted parcel and had allowed festival patrons to hike on logging trails on the easement parcel. They had planned similar activities for music festivals scheduled for 2007, but they had also pursued plans to construct a year-round 36-site tent and trailer campground on the easement property. The land trust sued the landowners, claiming that the new use was in conflict with the property’s restriction to “residential recreational purposes.” The court found for the land trust, holding that the easement unam- biguously prohibited the income-generating recreational activities proposed by the landowners. In addition to the use limitation of “residential recreational purposes,” the deed further states that the easement’s intent is to “prevent any non-residential use, non- recreational use or development which would conflict with [the land’s] natural, scenic condition” and that the property should provide “a place of recreation and natural solitude.”

Example: The Freeport Conservation Trust in Maine holds a conservation easement on a property that protects a view across fields of a salt- water farm, with a historic house at the roadside. The easement allows the house to be replaced but does not specify where. The easement also prohibits surface alterations except for farm roads. In the early 1990s, David Dunfey purchased the property and sought to move the historic house to the top of a field overlook- ing the bay. The land trust objected, but the owner began exca- vating a driveway and foundation, at which point the land trust obtained a temporary restraining order.5 The landowner brought

4. Windham Land Trust v. Jeffords et al., 967 A.2d 690 (Me. 2009). [http://tlc.lta.org/clearinghouse/ documents/232] 5. Freeport Conservation Trust v. David J. Dunfey, No. 95-483 (Sup. Ct. Cumberland Cty., three orders dated June 29, 1995; July 17, 1996; and Aug. 22, 1996) (unpublished). [http://tlc.lta.org/ clearinghouse/documents/34237]

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a variety of counterclaims, including trespass, assault, estoppel and delay and sought to have the easement declared invalid for a number of technical reasons. The trial court held for the land trust on all issues, citing the surface alterations provision. Although the land trust prevailed, the violation might have been prevented in the first place if the easement had been clearer about where the house could be relocated.

Stewardship Risks

Violations Upholding your land trust’s conservation easements and defending its fee- owned land are two of your land trust’s most important obligations. The IRS requires land trusts to monitor and enforce all their conservation easements in order to be eligible to hold easements that may qualify for federal tax benefits. They must also have the commitment, capacity and capability to uphold their conservation easements forever. As a charity regulated by the IRS, a land trust must also act according to its mission. If the mission of your land trust, for example, is to perpetually save land, then your land trust must be prepared to do so. Most attorneys interpret this requirement to mean that land trusts must address all violations, even technical ones, in a manner proportional to the severity of damage to the conserved resources. Failure by a land trust to resolve even a single conservation easement violation can cause unpleasant consequences. The land trust may face:

• Disqualification from accepting further tax-deductible conservation easements • Statutory fines • The loss of its 501(c)(3) status • The loss of protected land

Even if the land trust avoids these penalties, at the very least, failing to take appropriate, proportionate and reasonable steps to respond to every conservation violation may endanger the organization’s credibility in its community and

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with its landowners. Given the consequences of failing to address violations means land trusts must address all violations no matter how difficult or fright- ening the prospect.

Example: A December 2010 letter from the IRS revoked an organization’s 501(c)(3) status because, among a long list of defects, the organization had no designated easement enforcement fund and no apparent program for enforcing conservation easements other than sending copies to the local planning office.6 In addition, the president of the organization claimed to be the sole monitor for all of the easements, and he kept no monitoring records.

Resolve potential violations promptly and proportionately. Procedures for enforcement of easements vary among land trusts, but land trusts typically follow seven major steps when addressing a potential violation. The order of the steps may vary slightly depending on the circumstances, but most land trusts:

1. Identify the potential violation 2. Document the potential violation 3. Review the documentation 4. Determine if it is a violation and, if so, its severity 5. Respond with an appropriate proportional education and enforcement strategy, including full documentation 6. Work with the landowner to address the violation 7. Identify lessons from the experience and apply those lessons to the land trust’s policies and procedures

Throughout the process, remember to respect landowner privacy and maintain a respectful tone. If the landowner is a successor landowner, this may be the person’s first significant interaction with land trust staff, so be patient and keep in mind your land trust’s long-term relationship with the landowner while

6. IRS Private Letter Ruling 201110020 (Dec. 17, 2010). [http://tlc.lta.org/documents/6940/file]

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also firmly upholding conservation permanence. At the end of the process, take the time to draw lessons from the violation and your response to it so that you can improve your land trust’s response when addressing similar violations in the future. Learning from past events is a critical component of managing risk. Institute an iterative process for applying lessons learned to land trust practice. Collect information detailing what you learn from experiencing violations and from landowner feedback and take time to analyze this internally, making sure to discuss the events with all key parties. Next, apply what you have learned to improve project development, conservation easement drafting and stewardship procedures. Your land trust may avoid, or at least mitigate, the severity of future violations by adjusting its practices. You may also identify trends and recurring issues that cannot be resolved so simply. Take the time to track the effectiveness of responses to easement violations, as well as the effectiveness of your community relations, so you can spot trends. Doing so helps you to better manage risk and increase the likelihood that the next legal challenge will be shorter, cost less and damage fewer relationships, or—perhaps—you may be able to prevent it altogether. Systems improvement gets harder as you get more sophisticated because you have already changed the easy items, but continue the learning loop to help facilitate steady improvement. Finally, please report the violation and its conclusion to the Land Trust Alliance; send a quick message to the Conservation Defense Center (conservationde [email protected]). Your experience may help other land trusts avoid similar situations in the future. For more information on violation resolution and easement defense, see chapter three of Managing Conservation Easements in Perpetuity. [http://learningcenter.lta.org/ltalrn/stewardship/managing_ces_in_perpetuity/]

Amendments If a land trust decides to amend an easement, it must carefully weigh a number of factors to ensure it is acting correctly. The fundamental principle to keep in mind is that conservation easements serve public interests. Any decision to amend or to not amend a conservation easement must also serve public inter-

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ests. The fact that easements are perpetual does not constrain improvements in the easement when such improvements clearly serve the public interest better than the easement as originally written. Any amendment must also be consistent with the land trust mission and uphold the conservation purposes of the conservation easement and the original grantor’s intent. Because easements are perpetual, land trusts must protect the public interest by ensuring that conservation easements not only endure but also are enforceable and fair, both to the public and to the landowners who are partners with land trusts in protecting the land. The occasional need to amend an easement is rooted in our inability to predict all the circumstances that may arise in the future; however, you should approach any change to a conservation easement with great caution and careful scrutiny and always uphold the purposes of the conservation easement. The concept of amendment recognizes that neither the original grantors nor the land trusts are infallible, that natural forces can transform a landscape in a moment or a century, and that amendments can either increase or decrease the levels of protection. Exceptional circumstances sometimes warrant amendments. A land trust should prepare for that possibility and, at the same time, ensure that the conservation values of a property are protected. Time brings many changes, and humility suggests that we cannot anticipate all eventu- alities in even the best written conservation easement. For more information on responding to amendment requests and evaluating their potential risks, see “Amending Conservation Easements: Evolving Practices and Legal Prin- ciples” [http://tlc.lta.org/library/documents/1830] and chapter two of Manag- ing Conservation Easements in Perpetuity. [http://learningcenter.lta.org/ltalrn/ stewardship/managing_ces_in_perpetuity/]

Example: Illinois’s conservation easement enabling statute has a unique provision that allows landowners within 500 feet of a property subject to a conservation easement to enforce the easement in court. Accordingly, in 2003, a neighboring landowner sued Lake Forest Open Lands over its approval of an amendment to an ease-

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ment.7 The Illinois court found in favor of the neighboring landowner, stating that the land trust was not authorized to approve an amendment that conflicted with the original provisions of the easement. This case has continued through 2012 with numerous court actions and further contention. It has hampered the land trust in its acquisition of more conservation easements and harmed the community’s perception of the land trust.

Trespass Trespass is one of the most common violations that occur on conservation property. Neighboring landowners or developers may pose a threat to land trust conservation interests through unauthorized activities or unsubstantiated claims to the property. By trespassing on conservation property, these individuals can threaten conservation values, such as the protection of ranchland or wildlife habitat. While these suits often lack merit, you should be aware of the possibility and be prepared for such suits.

Example: The Nevada County Land Trust in California and the owners of conserved land prevailed in a civil lawsuit brought by an adjacent landowner who attempted to build a road across protected land to gain extra access to his property.8 The protected land is a ranch, and the proposed access road would have had a significant impact on its operation. The neighbor claimed that old homesteader trails likely crossed the conserved land and that, as public byways, the trails could be used and developed by him as a way to access his 160-acre adjoining parcel. Without this new road, he claimed, his property would be landlocked. However,

7. Bjork v. Draper, 886 N.E. 2nd 563 (Ill. App. Ct. 2008). [https://www.landtrustalliance.org/ conservation/conservation-defense/conservation-defense-insurance/CDdocuments/bjork-v-draper- summary.pdf/view] 8. Garfinkel v. Nevada County Land Trust, No. 71098 (Cal. Super. Ct., Nevada County, Aug. 21, 2008). [www.lta.org/conservation/conservation-defense/conservation-defense-insurance/CDdocuments/ trabucco-decision.pdf]

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a prior owner had already established a different and longer access route to the property that did not traverse the conserved land. While the longer access route was unpaved and inaccessi- ble by car, the neighbor had bought the land with full knowledge of that restriction. The judge ruled that the evidence of historic homesteader roads on the conserved land did not substantiate the neighbor’s claim. The neighbor based his case on expert testimony and on maps showing roads dating to the 1850s. But the expert witness contradicted himself when he said that the natives would not have made any permanent trails and that most homesteaders would have used a different route farther south. The judge ruled that the two maps, county tax records and expert testimony were not enough evidence to prove that the roads ever crossed the conserved land. While the land trust prevailed, the trial was lengthy and required hours of depositions, expert testimony and numerous attempts at negotiation. Land trusts should bear in mind that even seemingly frivolous claims can develop into expensive, protracted litigation.

Third-Party Standing Third parties—such as neighboring property owners, the Attorney General and the Internal Revenue Service—may have rights to challenge land trust actions that do not comply with the law, violate the original easement’s purposes or are inconsistent with the land trust’s mission. In most cases, courts have held that only parties named in the easement can sue to enforce. However, case law is still developing. Courts have found exceptions to this general rule, and some states, such as Illinois, expressly provide for third-party challenges. If you live in a state that allows third parties to challenge, you should consider contacting any third parties that may have an interest in the property before amending the easement or granting discretionary permission for special activities on the land.

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Example: A 2006 case in Tennessee regarding a city-held conservation easement found that an environmental organization had standing as did any resident of Tennessee because they are a beneficiary of a conservation easement.9 The court looked to the Tennessee Conservation Easement Act, which provides that a conservation easement may be enforced by a “holder and/or beneficiaries” and declares that conservation easements are “held for the benefit of the people of Tennessee.” As a result of this case, the Tennessee legislature amended the conservation easement act for all easements granted after July 1, 2005, to expressly prohibit third-party standing—with the exception of that of the Attorney General—if the original holder is no longer in existence. In contrast, in a 2009 case, a New Hampshire court found that neither neighbors nor the general public has standing to enforce conservation easements under the New Hampshire conservation easement enabling statute.10 A court ruled similarly in a 2010 Massachusetts case.11

For a full list of all standing cases related to private conservation organizations as of May 23, 2012, see the collection on third-party enforcement in the Conservation Defense Clearinghouse. [http://tlc.lta.org/clearinghouse/ collections/3]

Community and Landowner Relations Risks

Philosophical or Financial Differences Some legal challenges may be unavoidable. For example, individuals who simply don’t agree with a conservation easement or who have a business moti- vation for a challenge may sue despite your best efforts. However, your land

9. Tennessee Environmental Council, Inc. v. Bright Par 3 Associates, L.P., Docket No. E2003-01982- Coa-R3-Cv., 2004 Tenn. App. LEXIS 155, 2004 WL 419720 (Tenn. Ct. App. 2004) (unpublished). [http://tlc.lta.org/clearinghouse/documents/204] 10. Tallman v. Outhouse et al., Docket No. 08-E-0238 (Rockingham Cty. Super. Ct., N.H. Oct. 26, 2009) (unpublished). [http://tlc.lta.org/clearinghouse/documents/793] 11. Granara v. Stetson Kindred of America, Inc., Docket No. 10 MISC 429752 (Mass. Land Ct. Aug. 12, 2010) (unpublished). [http://tlc.lta.org/clearinghouse/documents/32042]

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trust can prepare itself to defend against such claims. One good strategy is to promote support of conservation in your community by cultivating an active and positive presence—hosting events that demonstrate the integral nature of conservation to a healthy community, for example. Develop a list of neighbors and other contacts for all land projects, including land trust volunteers who live close to various protected properties. These land trust friends can be your eyes and ears on the ground, and they can strengthen your relationships with landowners and the general public by acting as conservation ambassadors. They can also make informal observations of protected land and alert you if they see something amiss.

Example: An aging landowner in declining health donated a conservation easement on a 28-acre parcel of land. She later moved into an assisted living residence and sold her property to fund her care. The successor landowners demanded that the land trust extinguish the easement, claiming that she was incompe- tent at the time of the donation. When the land trust defended the conservation easement at a public hearing on the successor owners’ application for a 39-lot and house subdivision on the property, a number of the donor’s friends came forward to vouch for her competency and her oft-expressed wish to preserve her property. The town denied the building permits. Soon thereaf- ter, the land trust/easement holder merged with a regional land conservancy, the Western Reserve Land Conservancy. Following the merger, the successor owners refused to let the new repre- sentatives enter onto the property to monitor the conservation easement, claiming that the conservancy was not a permitted assignee under the easement. The successor owners sued, and the trial court held that the surviving land trust succeeded to all of the rights, obligations and interests of the original land trust.12

12. Andrews v. Western Reserve Land Conservancy, Docket No. 10 CV 003211 (Ct. Common Pleas, Lake Cty. Nov. 2, 2011) (unpublished). [http://tlc.lta.org/clearinghouse/documents/33284]

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The conservation easement assignment provision did not trump this statutory provision. The court ordered the successor landowners to pay the land trust’s attorney fees.

Example: Traveling up the Connecticut River, the view of the town of Lyme appears little changed from its founding in 1665. George Moore, executive director of the Lyme Land Conservation Trust in Connecticut, says that the trust knows the importance of good stewardship of its 95 properties, including 64 easements and 400 acres of linked trails, and its obligations to the community it serves. About half of the town’s 1,000 households are land trust members. The organization’s 15 directors and about 40 additional volunteers do much of the work. So it was an eye-opener when a dispute over its very first easement brought the 44-year-old land trust to court for the first time. The land trust tried to educate and to engage the new owners of the sensitive waterfront property—as it had the two previous owners. But continually rebuffed and with infractions escalating, the land trust finally filed suit to enforce the easement.13 Concerned that the community might lose faith in the organization, Moore then reached out publicly to explain to the owner the land trust’s fiduciary responsibility to uphold conserved land in perpetuity. That’s when the landowner sued Moore himself for defamation. In response, the town select- men went on record to state their support for the land trust and its directors. As of the end of 2012, there is no end in sight to the case in Lyme, and costs are escalating. Moore is grateful for the wonderful support of many in town, and grateful that the land trust has directors and officers insurance to cover the personal lawsuit.

13. Lyme Land Conservation Trust, Inc. v. Platner, Docket No. CV096001607, 2010 Conn. Super. LEXIS 1571 (Sup. Ct. Conn. Jud. Dist. New London, June 24, 2010) (unpublished).

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Clearly, long-standing positive relationships between a land trust and community members are critical to upholding conservation permanence and supporting the land trust when facing a legal challenge.

Landowner Challenges of Restrictions Landowners may bring suit against a land trust for restrictions on their property that they believe are not enforceable. A landowner may also challenge a particular restriction of a conservation easement in an attempt to have the easement terminated. The decided cases so far suggest that the landowner may face an uphill battle when trying to terminate an easement; however, the litigation costs and time spent protecting an easement will severely impact a land trust. Because land disputes can be so contentious, courts are generally reluctant to dismiss such cases before carefully reviewing all of the details. A landowner may not have a strong case against the land trust, but the litigation will still cost the land trust significant time and money. To help manage landowner risk and avoid costly litigation, land trusts should regularly communicate with easement landowners to maintain good relationships. Competent drafting of easements can head off arguments over meaning or close legal loopholes, and thorough recordkeeping can “remind” the landowner of earlier promises—all crucial to managing this risk.

Example: In a 2008 Michigan case, a landowner made several claims against the Leelanau Conservancy related to a conservation easement that allows the public to access the Conservancy’s adjacent preserve via the landowner’s private property.14 The landowner sought termination of the easement in its entirety because he claimed that the public access led to vandalism, trail erosion and other damage to the conservation values in the deed, thereby making the entire conservation easement invalid. The court found that, even if one or more trespasses occurred on the landowner’s

14. Leelanau Conservancy v. Roth, Docket No. 08-7768-CZ, 08-7738-CE (Circuit Ct., Leelanau Cty., May 27, 2008) (bench orders) (unpublished). [http://tlc.lta.org/clearinghouse/documents/228]

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property, the public purpose of the conservation easement would not be “impossible to fulfill,” which was the standard set in the conservation easement. Thus, the court denied the landowner’s demand to terminate the conservation easement.

In this example, the landowner challenged the restriction as a counterclaim in a suit filed by the land trust for enforcement of the easement’s provisions. The landowner’s challenge prolonged the litigation, complicating the case and increasing litigation costs. While it is likely that such tactics are unavoidable, land trusts can try to limit the possibility of flimsy counterclaims with careful drafting during the creation of the easement. Successor owners and their attorneys will be clever and innovative in finding a court to hear a termination case. They will use available statutes and circumstances in an attempt to prevail, often at any cost.

Example: The 45-acre Jurgielewicz Duck Farm was one of two remaining duck farms in Suffolk County, Long Island. In 2007, the farm sold development rights to the town and the county. Then, three years later, it filed for Chapter 11 bankruptcy. As part of the bankruptcy proceedings, the farm’s debtor-in-possession lender, Couack Capital Corporation, sought to sell the property free and clear of any restrictions and with its full development rights.15 The county and town objected. Couack cited a particular state real property statute allowing for the termination of restrictive covenants as evidence of applicable non-bankruptcy law. Mean- while, it also claimed that the county or town could be compelled to accept a money satisfaction for the development rights, citing various examples of easement holders being compensated in an eminent domain context. The bankruptcy court rejected both of the lender’s arguments, holding that: (a) a more particular statute

15. In re Jurgielewicz Duck Farm, 2010 Bankr. LEXIS 1507, 2010 WL 2025503, No. 8-10-70231-478 (Bankr. E.D. N.Y. May 20, 2010). [http://tlc.lta.org/clearinghouse/documents/801]

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addressing restrictive covenants held for charitable purposes by governmental entities applied instead of the more general statute invoked by the lender; and (b) monetary damages would not adequately protect the town’s and county’s interest in protecting the farm property.

This is an important case that could serve as useful precedent in a variety of contexts in which a party seeks to terminate a conservation easement, in bankruptcy or otherwise. The opinion includes a few pro-conservation passages, including a conclusion that the purpose of an agricultural restriction “is not defeated even though years may pass before another farmer takes over the land.” Remember that a land trust can prevail if you are prepared to meet the legal challenges.

Contractual Risks

Contract disputes are another source of significant risk for land trusts. Your land trust can reduce the risk of contract disputes through careful drafting, review of contracts and by obtaining independent legal advice when necessary. It is important that you understand all of your risks and responsibilities under any agreement before signing it. Generally, a party cannot rescind a contract simply because he or she did not understand it. Common sense suggests that greater clarity in documentation can reduce the risk of adverse consequences and help an organization avoid trouble later. For example, all documents should clearly lay out both parties’ expectations, the context of the agreement, any criteria or conditions related to the transaction and define key terms. The goals of any document should be to strengthen relationships, reduce uncertainty, allocate risk appropriately, improve understanding, mitigate or avoid disagreements, provide criteria for decisions and clarify the decision-making process. Depending on the nature of the transaction, parties may wish to include a statement of purpose, definitions of key terms, information and instructions for contacting the parties, provisions for liquidated damages and/or a delineated dispute resolution process.

21 MANAGING RISKS AND THE COSTS OF LITIGATION Identifying and Managing Risks

The most common contract claims land trusts face include breach of contract, fraud, mistake and tortious interference. While not all claims can be prevented, a land trust can minimize its contractual risks by ensuring that the document’s meaning is clear and that the parties have a complete understand of the agreement and a dispute resolution process.

Breach of Contract If a party fails to do what he or she promised in a contract, a breach occurs. In some cases, the breach can be cured by notifying the breaching party and giving them a chance to correct the breach. In other cases, breaches can be minor, entitling the non-breaching party to small monetary damages. In still other cases, breaches can be major, which may allow the non-breaching party to avoid fulfilling duties under the contract in addition to receiving greater monetary damages. Even if the other party to a contract is responsible for the breach, your land trust should immediately discuss the situation with your attorney to determine the best course of action before you make any decision or take any other action, including doing nothing. Failure to address a breach could be considered a waiver and, in some cases, failure to grant the breaching party an opportunity to fix the breach can be a breach in and of itself. Not all breaches by the other party will result in a termination of the contract or absolve the land trust of its contractual obligations, but continuing to follow the contract’s terms might also not be the best course of action in the case of a breach. Be sure to consult your legal counsel on this point.

Example: A recent breach of contract claim against a land trust also involved a right of first refusal (the right to purchase property on the same terms and conditions as an offer to purchase the property made by a third party).16 A Massachusetts town exercised its right of first refusal on a forest property and assigned it to the Trust for Public Land. TPL’s national board voted to accept the assignment

16. Kunelius v. Town of Stow, 588 F.3d 1 (1st Cir. 2009). [http://tlc.lta.org/clearinghouse/documents /758]

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but deferred approval of closing on the project until more funding could be secured. Ultimately, TPL and its partners were unable to finance the purchase and, thus, breached the contract. While TPL paid liquidated damages in the amount of $19,000 as specified in the purchase and sale agreement, the landowner brought suit for specific performance. The court held for TPL, affirming that the liquidated damages provision of the original contract carried over to TPL as the assignee of the right of first refusal and that the amount of such damages was reasonable.

Example: In 2007, the Center for Natural Lands Management in Califor- nia faced a breach of contract claim when it refused to sign the IRS Form 8283.17 The executive director refused to sign because she did not view the sale of the property as a donation given that the city and state had required the protection of the 29 acres as a condition for the development of the rest of the property. The purchase and sale contract included a provision stating that neither party was relying on tax advice from the other party and that the land trust was making “no representation or warranty whatsoever regarding the tax treatment to Seller of this Agree- ment.” Because of the “no tax advice” provision, the court held that the land trust had no express or implied contractual obligation to sign the Form 8283.

Fraud When one party to a contract intentionally misrepresents a fact to the other party, there may be fraud. The innocent party’s consent to the contract is not considered voluntary because he or she did not know the true facts.

17. Headlands Reserve, LLC v. Center for Natural Lands Management, 523 F. Supp. 2d 1113 (C. D. Cal. 2007). [http://tlc.lta.org/clearinghouse/documents/178]

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Example: In 1989, the owner of a 25-acre parcel contacted the Maryland Environmental Trust to inquire about donating an easement on the property. The land trust informed the landowner that it usually did not accept easements on less than 50 acres of property. The landowner then worked with two neighbors who owned adjacent property to create a larger acreage donation. As part of the transaction, the landowner agreed to a prohibition on subdivision of his property because the land trust had stated that it strongly opposed the property’s subdivision. Later, the landowner found that both neighbors had been permitted to subdivide their properties. The landowner sued, alleging that the land trust had misrep- resented the facts when insisting on the subdivision prohibition.18 The trial court agreed that the land trust’s failure to state that the subdivision prohibition was optional constituted fraud. The court ordered a rescission of the easement. The land trust appealed and, ultimately, proved that it had made no intentional misrepre- sentation. The decision was reversed. Had the decision not been reversed, the court-ordered rescission would have extinguished the easement.

Mistake Parties have a duty to read and understand the contracts that they sign. A party cannot rescind a contract because of a misunderstanding or mistake related to the law. However, in some situations, a mistake over a “material fact” might allow a party to withdraw from a contract. A mistake of material fact in a contract case could be an ambiguous description that results in some major misunderstanding, such as when the parties enter into an agreement on the basis of an assumption that they later discover is incorrect. This kind of mistake means that there is no enforceable contract because there was never a real agreement.

18. Maryland Environmental Trust v. Gaynor, 803 A.2d 512 (Md. 2002), reversing Environmental Trust v. Gaynor, 780 A.2d 1193 (Md. App. 2001). [http://tlc.lta.org/documents/178/file]

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Example: In order to effect a mitigation land conservation contribution, a developer and the Habitat Trust for Wildlife entered into an agreement on the basis of the assumption that the city would approve the land trust as a Qualified Conservation Entity (QCE). A year later, the city adopted criteria for evaluating QCEs, determined that the land trust did not meet the criteria and recommended that the mitigation parcel be conveyed to a county agency instead. The land trust sued the city for due process and the developer for breach of contract.19 The developer sought to rescind the contract on the basis of mutual mistake. The trial court agreed with the city and the developer and dismissed the land trust’s case.

While it is rare for a court to void a contract for mistake, it can happen. To avoid such situations, land trusts should try to collect as much information on the transaction as possible and be sure that all basic assumptions are true and are fully documented.

Tortious Interference When one party convinces another party to breach a contract or disrupts the ability of a party to perform his or her obligations under the contract, the other party to the contract may claim tortious interference with contractual relations. Land trusts must make good faith efforts to understand the obligations of the parties and never make decisions on the basis of ill will. Be sure to document all decisions and tie those decisions to the reasons for the contract.

Example: A recent claim of tortious interference with contractual relations involved a right of first refusal. In 2004, the Vermont Land Trust exercised its right of first refusal on a farm subject to a conservation easement after receiving notice from the landowners of a purchase and sale agreement on the property. VLT then

19. Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga, No. E042229-E043925-E044797, Cal. App. 4 Dist., July 21, 2009. [http://tlc.lta.org/clearinghouse/documents/706]

25 MANAGING RISKS AND THE COSTS OF LITIGATION Identifying and Managing Risks

assigned its interest to neighboring dairy farmers. Despite being aware of VLT’s right of first refusal, the eager potential buyer of the property was angry that he could not buy the farm and sued the neighbors, the real estate broker and VLT for tortious interference with his contract.20 The trial court dismissed all claims against the defendants, and the Vermont Supreme Court upheld the trial court in all respects. VLT was not liable for tortious interference because it was simply exercising its contractual right and there was no evidence of malice, ill will or other improper motive.

Additional Litigation Risks

Hazardous Waste Liability Hazardous materials existing on or disseminated from land trust property may cause a land trust to be sued under the federal Comprehensive Environ- mental Response, Compensation, and Liability Act (CERCLA).21 This risk increases on property that was previously used for either commercial or industrial purposes. To both avoid harm from exposure to hazardous materials and prevent a possible CERCLA lawsuit, land trusts should perform appropriate environmental due diligence to thoroughly investigate and identify any hazardous materials on or near the property and to determine whether the property is a brownfield (an abandoned industrial or commercial site that has potential for redevelopment but may also be contaminated with hazardous waste). Due diligence reduces the chance of future CERCLA liability. For more information, see Practice 9C of Land Trust Standards and Practices and “Hazardous Material Liability under Federal Law for Conservation.” [http://tlc.lta.org/ clearinghouse/documents/825]

Example: In 2000, The Nature Conservancy purchased 6,660 acres of land in Illinois from the Wilder Corporation. Wilder then leased the land back from TNC so as to continue a 5,000-head cattle

20. Field v. Costa, 2008 VT 75. [http://tlc.lta.org/clearinghouse/documents/190] 21. CERCLA: Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§9601–9675. [http://www.law.cornell.edu/uscode/text/42/chapter-103]

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operation. Prior to and after the closing, a variety of environmental contamination issues (cattle sewage lagoons, petroleum leaks, rubbish and trash) arose, and TNC eventually filed suit against Wilder for breach of contract for not honoring its obligations to clean up the contamination.22 TNC eventually won on most of its claims, and Wilder’s counterclaims were dismissed. TNC was able to prevail because it exercised due diligence in inspecting the property, carefully drafted purchase documents to protect itself from risk, and made sure to file suit within the time prescribed by the applicable statute of limitations. Due diligence on all points by a land trust are absolutely critical.

Example: In another case in California that didn’t directly involve a land trust, a court held that holding an easement (in this case, a pipe- line easement) does not make one an owner under CERCLA.23 The court also noted that holders of scenic easements are not subject to CERCLA liability. However, whether easement holders such as land trusts could be liable as operators under CERCLA will depend on the facts and circumstances of the case.

Civil Rights Act/RICO/Unfair Trade Practices Recently, opponents of land conservation have found a new use of the Civil Rights Act of 1871 (42 USC 1983). The act gives individuals the authority to sue to redress violations of federally protected rights, but a few conservation opponents have started to use it as a way to include land trusts in lawsuits over alleged “regulatory takings” or lack of due process claims by landowners unhappy with local zoning decisions or changes. Various types of legitimate

22. Nature Conservancy v. Wilder Corporation of Delaware, 656 F.3d 646 (7th Cir. 2011) affirming 2009 U.S. Dist. LEXIS 58727 (N.D. Ill. July 10, 2009); see also 2008 U.S. Dist. LEXIS 101722 (N.D. Ill. Dec. 16, 2008); 2009 U.S. Dist. LEXIS 44555 (N.D. Ill. May 28, 2009); 2009 U.S. Dist. LEXIS 52720 (N.D. Ill. June 23, 2009). [http://tlc.lta.org/clearinghouse/documents/33456] 23. Long Beach Unified School District v. Dorothy B. Godwin California Living Trust et al., 32 F.3d 1364 (9th Cir. 1994). [http://tlc.lta.org/clearinghouse/documents/333]

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engagement by land trusts in land use issues may be cited in an attempt to establish a “conspiracy” by the land trust to deprive landowners of their civil rights and due process. The federal Racketeer Influenced and Corrupt Orga- nizations Act (RICO) and various state laws against conspiracy and unfair trade practices may also be used to sue in cases where a conspiracy is perceived. Sometimes, efforts to establish a conspiracy claim in court are merely a creative strategy by an attorney to collect damages and/or legal fees. However, it could also be a strategy to deter land trusts from pursuing their conservation mission by making it very costly. Still, land trusts can prevail if they have sufficient resources. You should analyze the political climate in your area to assess the likelihood of a group having views that might lead them to initiate such a suit. If you believe such a suit is likely, then your land trust should take immediate steps to strengthen your ties to the broader community so they come to your defense if necessary. You should also have legal counsel prepare several strategies to counter such an action. In addition, you should always be careful to follow all procedural requirements of notice or hearing when involved in property disputes.

Example: The French and Pickering Creeks Conservation Trust in Penn- sylvania obtained a court order to demolish a house that had been built on protected property contrary to the easement.24 Subse- quently, the land trust applied for a demolition permit and hired a demolition contractor who demolished the house, its contents and the well that serviced the house. The owner of the house sued in federal court on the basis of the Civil Rights Act, claiming he had been deprived of due process because he didn’t receive adequate notice or opportunity to be heard and the demolition of his house and property constituted a taking under the Fifth Amendment. The court dismissed the claims because the owner failed to indicate any ordinance, code or federal law that would require notice

24. Natale v. Schwartz, 151 F. Supp. 2d 562 (E. D. Pa., 2001). [http://tlc.lta.org/clearinghouse/ documents/250]

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or hearing and, further, the owner clearly had due process when the case was heard in court.

Strategic Lawsuits Against Public Participation (SLAPP suits) A well-funded entity may file a frivolous claim against a land trust as a way of intimidating the land trust from acquiring land or a conservation easement or for advocating on a public issue. Land trusts often compete against commercial interests in their attempts to acquire a property or pursue their land-saving mission. A Strategic Lawsuit Against Public Participation is intended to scare opponents into abandoning their public position by filing expensive lawsuits.

Example: In 1979, The Nature Conservancy and six of its staff were sued in Washington State court in 1975 for $2.79 million.25 What had TNC done? According to the complaint, filed by seaweed farm developers on scenic San Juan Island, all TNC did was inventory “potential natural areas” that should be preserved (including the land belonging to the filers) and recommend acquisition of these areas by the county government. From this seemingly harmless act, the plaintiffs (or persons bringing the suit) crafted a lengthy complaint alleging, among other things, trespass, conspiracy to deprive them of equal protection, unfair trade practices and inverse condemnation. The case was finally dismissed after four years in litigation. The court held that no reasonable person could find that TNC trespassed on plaintiffs’ land; that plaintiffs failed to offer any applicable authority to support a duty to notify and hold public hearings; and that plaintiffs failed to show any lack of equal protection. The verdict may have been in TNC’s favor, but TNC was faced with paying for hours of attorneys’ fees, research costs, deposition costs, the cost of transcripts from a court reporter and

25. Lange v. Nature Conservancy, 24 Wash. App. 416. [http://www.leagle.com/xmlResult.aspx?xmldoc =197944024WnApp416_1376.xml&docbase=CSLWAR1-1950-1985]

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other document production costs—not to mention the psycholog- ical cost of protracted litigation.

The good news is that the overwhelming majority of SLAPPs are dismissed. The bad news is that even a losing lawsuit extracts time, dollars, energy and emotion from the winners—in the real world, organizations often think twice about engaging in a project or speaking out if they feel threatened by a lawsuit. Because of this stifling effect, many states have passed anti-SLAPP laws over the past couple of decades. While some frivolous lawsuits cannot be avoided, your land trust can reduce the risk to some extent through a few simple steps, such as building community support and working collaboratively with a wide range of community interests. If your land trust routinely engages in advocacy on public issues, you should carefully analyze your risk of encountering such suits and have strategies in place to lessen their likelihood or at least pay for defending against them should you be forced into litigation.

Unauthorized Practice of Law Only legal professionals who are licensed or otherwise authorized to practice in a given area (usually by the state bar association) may practice law. The practice of law can encompass many activities. However, it basically means giving clients or others legal advice or drafting legal documents on their behalf. While your land trust may gain significant familiarity with real estate, tax and conservation laws, land trust personnel should never give legal, tax, financial or other advice. For example, staff or board members should not advise a landowner on how much of a tax deduction to expect for an easement donation, and best practices require the land trust to recommend to landowners, in writing, that they engage their own counsel for any transaction. The unauthorized practice of law is a crime in most states, which can leave land trust staff or board members subject to fines or time in jail if found guilty. What land trust personnel can do, while avoiding the unauthorized practice of law, is to share general information with a landowner without making specific promises. Advising a landowner that he or she should donate a

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conservation easement because he or she will receive a charitable deduction of a certain amount invites a lawsuit. To find a balance, land trusts need to learn how to talk to landowners and how to document those discussions. However, if a land trust sees a transaction that is seriously flawed and could—if scruti- nized—result in the denial of a charitable contribution, the land trust has an ethical duty to take some measured appropriate action, even if there is not a legal duty to do so.

Becoming Involved in an Ongoing Lawsuit Your land trust may choose to “intervene” in a lawsuit between other parties if the result of the litigation could potentially have a significant negative effect on your land trust’s interests. For example, a land trust might consider interven- ing in a case on the side of a public agency to support a stand against a landowner who has egregiously violated the law in a way that affects a property’s conservation values and also violates the conservation easement. If choosing this option, your land trust must follow a standard procedure, which includes filing a motion with the court that states the grounds for intervention. Before you act, think carefully. Involving your land trust in a lawsuit may affect your reputation in the community and it may be costly and time- consuming. However, intervention also could be either beneficial to the land trust’s mission or essential to the land trust’s integrity. Only your land trust board, in consultation with legal counsel, can weigh the risks and benefits and make the appropriate decision.

Example: In a North Carolina case, both the state and the Southern Appa- lachian Highlands Conservancy intervened in a trespass lawsuit where the owner of property protected by an easement co-held by the state and the land trust sued a neighboring landowner for trespass.26 The neighboring landowner wanted to build a ford across a creek despite the fact that another ford already existed and the creek was part of a protected riparian corridor. The landowner

26. Woltz v. Taylor, 698 S.E. 2d 768 (2010). [http://tlc.lta.org/clearinghouse/documents/32049]

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sued the neighbor for trespass. The easement holders sued sepa- rately, asking that the court clarify their rights in a suit to quiet title. A suit to quiet title is a request made by the owner of the title for the court to adjudicate on a competing claim to the title—such as a claim for a prescriptive easement permitting access across the conserved property to a neighbor’s property. The conservation easement holders then intervened in the landowners’ case by requesting that their suit to quiet title be joined to the trespass case. The court granted the request and found that the neighboring landowner did not have the right to build the new ford.

Preparing to Manage Risk

Once you have identified areas of risk and eliminated those areas that your land trust can avoid without compromising its mission, the next crucial step of risk management is to prepare for the risks that cannot be avoided. It is impossible for land trusts to avoid all risk and remain functional. However, with careful preparation, a land trust can greatly mitigate its risk. There are a number of strategies to help your land trust manage the risks that come with its work. Land trusts should spend the time and money necessary to craft solid recordkeeping systems, baselines for every easement and community and landowner relationship programs, and they should strive to keep all properties free of hazards. These activities are not frills to be funded after that next critical easement or land acquisition; rather, they are vital to meeting the promise of perpetuity by helping to keep your land trust out of court and in the business of protecting the cherished places in your community. Taking the time to prepare for risks in advance is not just helpful—it’s essential for any land trust that is serious about carrying out its mission.

Records: Maintenance and Storage

Recordkeeping can reduce your risk of litigation by enabling you to respond accurately and in a timely fashion to requests about conservation easements.

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Good records can also help keep your land trust organized in case of litigation. Remember that many years from now your records will be your land trust’s only evidence to defend its conservation rights in court. Eventually, all witnesses to the creation of the easement will no longer be living. Records are critical to defending an easement, but your land trust cannot predict which records will be critical in the event you face litigation or an IRS audit. Therefore, your land trust needs to craft a records policy that balances the risk of litigation with the practical reality that you cannot save every piece of paper and still hope to identify and retrieve a critical record when the need arises. Records that are unmarked, misfiled or buried in so much redundant paperwork that they cannot be located in a timely manner are as good as lost. A records policy is essential to ensure that records are identified and organized so that future land trust personnel will be able to locate documents when needed. There is no getting around the fact that land trusts have an enormous amount of information to track (land transactions, monitoring reports, board minutes, personnel or contractual arrangements and so forth). With so much information to track, it is important that you have a clear system for maintaining records that everyone in the organization follows all the time. The first step in crafting a records policy is to determine your land trust’s recordkeeping philosophy. Nonprofit Law and Recordkeeping for Land Trusts, Volume II: Recordkeeping Essentials for Land Trusts [http://learningcenter.lta.org/ ltalrn/governance/nonprofit_law_vol_ii/] explains the different philosophical approaches to recordkeeping, which range from litigation-oriented to internal problem solving–oriented. You should review pages 103–120 to determine what approach and policies best suit your land trust’s needs. The book also has essential information on document confidentiality and security. For further reading, chapter five of Acquiring Land and Conservation Easements [http: //learningcenter.lta.org/ltalrn/land_protection/acquiring_land_and_ces/] will guide you through the process of transactional recordkeeping, and chapter one of Managing Conservation Easements in Perpetuity [http://learningcenter .lta.org/ltalrn/stewardship/managing_ces_in_perpetuity/] will show you how to keep easement records to fulfill your stewardship obligations. Once you are comfortable with the basic issues involved in recordkeeping, go to the policy

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builder tool [http://pathways.lta.org/ayo/policy_builder/9G] on the Pathways section of The Learning Center to draft a policy unique to your land trust’s needs. Once you have a draft, have your legal counsel review it before board adoption. Once you have a policy in place, everyone should follow detailed written procedures to ensure that nothing is accidentally misplaced and that your land trust is not overwhelmed with documents. These procedures should describe how to establish, identify, collect, manage, store and purge records, as well as reflect your consideration of the records needed to advance your mission, what records might be helpful or necessary to defend your land trust and what records are required by law. Individuals responsible for creating or maintaining records should be well versed in your records retention guidelines. A well- organized and transparent system gives the land trust credibility in the eyes of courts, regulators and the community. In addition to issues of credibility, courts have specific rules that apply to documents before they can be offered as evidence. To comply with these requirements, your land trust’s records must be well organized and maintained. Be sure to have your lawyer explain your particular state’s laws to you because they vary. Your lawyer’s advice and the Land Trust Alliance guidelines will help you develop a records policy to avoid or withstand litigation.

Easement Monitoring Records Easement monitoring records include the annual completed easement monitoring report and any related labeled photographs and/or maps from the field. Documentation of monitoring visits should be maintained with the easement file. Organized records of your annual visits are critical to demonstrating that a violation has occurred and to establishing when a violation has taken place. Bear in mind that, in some situations, a statute of limitations may apply. Being able to establish that the violation occurred fairly recently may be critical to obtaining a successful resolution in court. In addition, having an organized file will help the land trust respond rapidly and professionally, without the anxiety of trying to track down missing or incomplete files, if faced with litigation.

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Example: The Nature Conservancy filed suit against a landowner in Kentucky for having filled a sinkhole contrary to the provisions of the easement on the property.27 TNC had discovered the alteration of the topography during a monitoring visit. The landowner claimed that the alteration was a consequence of growing crops. TNC was able to show that the defendants had not simply plowed the field, but they had filled it with approximately 6,269 cubic yards of fill material. TNC won the case, and the landowner had to remove the fill, replant the sinkhole with native species and pay TNC’s court costs pursuant to a provision for legal fees in the easement.

Baseline Documentation Reports

Create a baseline documentation report for every easement that includes all relevant information relating to the property at the time the easement was granted. Baselines are central to proving the condition of the land when the easement was acquired and, thus, are central to proving if a violation has actually occurred. The contents of the baseline may vary depending on the specifics of each property and the conservation easement, but there are a number of common elements required for all baselines. For a list of what needs to be included and tips on preparing a baseline, see chapter three of Conservation Easement Draft- ing and Documentation. [http://learningcenter.lta.org/ltalrn/land_protection/ drafting_and_documentation/] The landowner and land trust should both sign the baseline at closing and attest to the accuracy of the information contained in the report.

Example: In a 2009 New York case, complete and accurate recordkeeping was key to the success of the Western New York Land Conservancy

27. Nature Conservancy v. Sims, No. 5:07-CV-00112-JMH, 2009 U.S. Dist. LEXIS 17659 (E.D. K. Mar. 5, 2009). [http://tlc.lta.org/clearinghouse/documents/230] And see the appellate decision at The Nature Conservancy v. Sims, __ F.3d __, 2012 WL 1813675.

35 MANAGING RISKS AND THE COSTS OF LITIGATION Preparing to Manage Risk

in a trespass case.28 In this case, the land trust sued a neighboring landowner for trespass on its 120-acre fee parcel, on which the state of New York also holds a conservation easement. The neighbor cut mature trees, built two new roads and extended a pond onto the land trust property. Because of the land trust’s organized recordkeeping system, it was able to locate and include many key documents as evidence at the trial. The land trust also contrasted photos taken as part of the baseline documentation, which it had completed for the state, with photos taken after the trespass action to give the jury a clear picture of just how egregious the landowner’s trespass activities were. As a result, the jury awarded the land trust nearly $600,000 in damages.

Example: The Butlers granted four conservation easements on more than 4,500 acres of land in Georgia, reserving 11 two-acre building sites plus unlimited land divisions consistent with the purposes in one of the easements and limiting division rights in another to 15 parcels, none smaller than 200 acres.29 The sites reserved for future development were located by maps in unrecorded baseline documents that the easement incorporated by reference. The operative clauses limiting the location of reserved rights were only in the baseline. The court held that this question is determined by state conveyancing law and, in Georgia, reference in a recorded conservation easement to a map showing the location of the lots in the baseline report effectively made that map part of the recorded easement.

28. Cullen v. Western New York Land Conservancy, Inc., 886 N.Y.S.2d 303 (N.Y. App. Div. 2009). [http:// tlc.lta.org/clearinghouse/documents/229] 29. Butler v. Commissioner, United States Tax Court, T.C. Memo 2012-72, Mar. 19, 2012. [http://www. ustaxcourt.gov/InOpHistoric/ButlerMemo.TCM.WPD.pdf]

36 MANAGING RISKS AND THE COSTS OF LITIGATION Maintaining Good Relationships

Maintaining Good Relationships

One of the easiest ways to reduce the likelihood of litigation is to become a trusted member of the community. There are a number of ways to become a community institution, from sponsoring educational events for children and families to hosting public events that celebrate conservation and the land trust’s work. One key strategy is to provide information on land conservation and easements to local officials and real estate professionals. Involving community leaders creates goodwill between all of the parties involved and increases the chances that they will all make good decisions when the opportunity arises. Good landowner relationships, built through regular, ongoing communication and monitoring of conservation land is the best strategy to reduce litigation risk. Your land trust should have a process in place to address potential violations, beginning with careful documentation of and communication with landowners about the violation. Stay informed about activities on conserved land. Visit regularly and talk with the landowner. These visits are an opportunity to nurture relationships with landowners so that they remember to call the land trust when they are considering making changes to the land. Remember, communication is a two-way street. Spend time listening to landowners and their vision for their land. Establish a schedule to visit all easement properties at least once each year and maybe more often when a reserved right is being exercised. During a monitoring visit, document any changes to the land or potential violations of the easement. Although you should note potential violations, resist the temptation to discuss the issue with the landowner until the appropriate party in the land trust has reviewed the easement. Because every easement will undergo multiple landowner changes, consider developing a formal successor owner program to welcome the new landowner to the land trust “family.” The downside risks that arise from changes in ownership can be greatly minimized with a formal successor-owner program that includes a personal visit in which you introduce yourself and explain the easement to the new owner. This kind of meeting can avoid litigation from a new owner who may not understand or respect the restrictions of the easement

37 MANAGING RISKS AND THE COSTS OF LITIGATION Maintaining Good Relationships

in the same way as the original owner. The potential for misunderstanding increases with each successive transfer of ownership and with the passage of time since the original easement transaction. Compounding the problem, a landowner may forget to inform you that he or she has sold a property, so land trusts need to be attentive to the real estate market in their community.

Example: Beginning in 2000 and continuing over the next three years, Dennis Neal established a 12-lot residential subdivision. In 2001, before any lots were sold, Neal granted a conservation easement on Lot 10 (102 acres) to Colorado Open Lands. The conservation easement allows the grantor to grant access for recreational purposes to other subdivision lot owners and to establish unpaved footpaths on the protected property, with their layout subject to review and approval by COL. Neal began selling lots in 2003 and informed purchasers that they would have recreational access to Lot 10. An amended plat was recorded in 2004 that showed a 20-foot trail around the perimeter of Lot 10 and looping around ponds located in the interior of Lot 10, but it did not identify the trail as a formal easement. The amended plat was not presented to COL before it was recorded and was not signed by COL, and the alignment of this 20-foot trail was not otherwise approved by COL as required by the conservation easement. In 2005, the DeWolfs purchased Lots 7 and 10 and successfully negotiated with Neal for changes to the trail so that it did not go around the ponds and did not come near their abutting Lot 7. In 2006, COL staff noted the existence of an unapproved trail on Lot 10. It appears that Neal began construction of a trail but did not complete the work. The plaintiffs, various subdivision lot owners, sued the DeWolfs and COL in a quiet title action to assert their rights to a trail easement on Lot 10 that follows the path shown on the 2004 amended plat.30

30. Bolinger v. Neal, 2010 Colo. App. LEXIS 1536, Docket. No. 09CA1314 (Ct. App. Colo. 4th Div. Oct. 14, 2010). [http://scholar.google.com/scholar_case?case=2219036725424701154&q=Bolinger+ v.+Neal&hl=en&as_sdt=2,30&as_vis=1]

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The land trust won in trial court, but the appellate court reversed, holding that: (1) the 2004 amended plat did indeed create a trail easement; (2) the conservation easement permitted the grant of an easement for access to adjacent landowners; and (3) the use of the 20-foot-wide path on the 2004 amended plat was not an “improvement” and thus did not require COL’s approval. The court did not render an opinion about whether use of the easement area in a manner permitted by the conservation easement would require the construction of a narrower path to protect the conservation values. The appellate court focused solely on Neal’s right to grant an access easement on Lot 10 to the adjacent landowners—a right expressly allowed by the conservation easement. The appellate court limited the scope of COL’s approval rights to the creation of a footpath that would be improved in some manner through construction, even though the conservation easement specifically refers to a “non-paved footpath” as an improvement that is subject to COL’s approval. However, the appellate court specifically left open the issue of whether use of the easement area by the lot owners would damage the conservation values unless a footpath was established to mitigate the impacts. Thus, under a literal interpretation of the court’s opinion, the other lot owners have the right to walk on the 20-foot-wide easement, but COL could still find a violation of the conservation easement if any work is performed to establish or maintain a trail. The open question is whether COL could find a violation of the conservation easement if steady use of the easement area resulted in the creation of a trail without any specific construction work undertaken by the lot owners.

This very complicated case revolves around a series of landowner, neighbor and community relationships that the land trust now has to nurture to ensure the property’s protection.

39 MANAGING RISKS AND THE COSTS OF LITIGATION Maintaining Good Relationships

For more information on establishing and maintaining relationships with landowners, see chapter two of Conservation Easement Stewardship. [http:// learningcenter.lta.org/ltalrn/stewardship/ce_stewardship_/]

Safe Properties

All property owners, including land trusts that own land in fee simple, have a duty to keep their property safe for visitors, whether they are invitees, licensees, trespassers or the general public. This duty includes removing any potentially hazardous objects. A land trust is potentially liable for injuries occurring on land it owns and, in some instances, on land subject to easements that it holds and over which it exercises control. This liability varies considerably with the conditions on the land and the relationship that a visitor has to the landowner. For example, the landowner’s duty to warn a guest may be different from the landowner’s duty to warn a trespasser. Laws vary considerably from state to state. Some states do not distinguish between types of guests and only ask whether a reasonable person would have inspected the land or warned a guest of a dangerous condition. Other states assign different duties to the landowner depending on what type of visitor is on the property. Be sure to consult with a legal advisor as to the laws applicable in your state. The next section covers the different types of visitors and a landowner’s duties to them.

Duties Due to Various Types of Visitors Invitees: A person invited onto land trust property for business or profit-making purposes is an invitee. These could be customers of any commercial enterprise located on the property, employees of the property owner or subcontractors who perform their duties on the property, members of the land trust or the general public. Generally, a land trust owes the most duty to invitees—it must inspect the land for any dangerous condition, take steps to protect invitees and warn them of known dangers. Licensees: A licensee is someone who enters the land with permission but not for the landowner’s economic benefit. Examples of licensees include a social guest or a hunter with the landowner’s express or implied permission.

40 MANAGING RISKS AND THE COSTS OF LITIGATION Maintaining Good Relationships

The land trust may need to warn a licensee about any known dangerous conditions. Trespassers: A trespasser is a person without permission on land trust property. Most states provide no general duty to trespassers, except not to intentionally harm them. However, if the land trust has reason to know that there are trespassers, there may be a duty to warn them of dangerous conditions. A higher standard may also apply to a child trespasser under the “attractive nuisance” doctrine, which means that if your land trust properties contain dangerous human-made attractions that an average child may be tempted to use, such as a rope swing or swimming pool, you may be liable for any injuries the child sustains. Warning signs are not considered to be adequate deterrence in such situations. In some cases, tall fences or other barriers are necessary; it depends on state law and the site specific condition of the property, including its use. Not all states follow the attractive nuisance doctrine, however, and its application will vary considerably depending on state requirements and the property’s particular attributes. Your lawyer should be able to clarify what additional precautions, if any, should be taken. General public: In general, when undertaking any active operation on the property, such as trail maintenance or logging, the land trust has a duty to protect the public’s safety. Although state laws vary, a land trust that permits the general public to use land for recreational purposes without charging a fee is generally not liable for injuries suffered by a recreational user unless the land trust failed to warn of a dangerous condition or if the land trust was grossly negligent of the public’s safety. An example of gross negligence could be the failure to warn recreational users that a bridge long used by visitors is under construction and unsafe for passage. Be sure to have your lawyer explain your particular state’s laws.

Example: In a 2009 New York case, a recreational user sued the Scenic Hudson Land Trust for damages resulting from an injury that occurred on the land trust’s land.31 The trial court ruled on

31. Farley v. Town of Rhinebeck, 65 A.D.3d 1279 (N.Y. App. Div. 2009). [http://tlc.lta.org/clearing house/documents/35399]

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summary judgment to dismiss any claims against the land trust based on New York’s recreational use statute.

Example: Conversely, in a different case involving a state’s recreational use statute, a court found the land trust liable because the recreational user’s injuries occurred on a public road right-of-way abutting the land trust’s property.32 The land trust installed used utility poles on the boundary to prevent fishermen from parking on the land trust’s property. The poles were hidden by weeds and bushes, and the plaintiff was thrown from his bicycle when he hit the pole. The plaintiff claimed that the land trust was negligent in illegally placing the poles on the township’s public road right-of-way (a fee simple interest, not an easement). This case presents a potentially significant gap in the immunity protections of recreational use statutes: land trusts may become liable for actions taken on public road rights-of-way abutting easements or fee properties.

Example: In 2000, 23-year-old newlywed Simcha Berman and his wife paid an admission fee to visit the Breakers, an historic mansion in the city of Newport owned and operated by the Preservation Society of Newport. Their tour guide encouraged them to visit the nearby Cliff Walk, a famous tourist attraction, after the tour of the Breakers. The Cliff Walk is a footpath that runs across several private properties, including those of the Society. The city was responsible for maintaining the Cliff Walk, which is a public easement, much like a municipal street. Tragically, Berman fell from the Cliff Walk and suffered severe and permanent injuries, rendering him a quadriplegic. Berman fell after stepping onto what appeared to be a side footpath but was, in fact, an erosion

32. Walsh v. Open Land Conservancy of Chester County, 2005 WL 1655890 (E.D. Pa. Jul 13, 2005) (unpublished). [http://scholar.google.com/scholar_case?case=5215184734070520585&q=Walsh+v.+Op en+Land+Conservancy+of+Chester+County&hl=en&as_sdt=2,30&as_vis=1]

42 MANAGING RISKS AND THE COSTS OF LITIGATION Maintaining Good Relationships

washout. When Berman fell, he was on a section of the Cliff Walk owned by the Society. Rhode Island has a recreational use statute that provides immunity for landowners or land managers who do not charge the public to use their property for recreational purposes. Although the statute originally applied only to private landowners, it was amended in 1996 to extend to public landowners such as the city. Like many recreational use statutes, Rhode Island’s statute includes an exception for the “willful or malicious failure to guard or warn against a dangerous condition, use, structure, or activity.” Prior to 2000, there had been several other serious accidents leading to death or severe injuries on the Cliff Walk, and numerous documents published by national or state agencies recognized its hazards. Berman sued both the city and the Society.33 The trial court granted summary judgment in favor of the city and the Society, finding the recreational use statute fully effective in shielding them from tort liability. Berman appealed, raising several issues. He contended that the Society’s tour guide had invited him onto the Cliff Walk, thus invoking an “invitee” exception to the recreational use statute. He also claimed that the Society and the city were engaged in joint management of the Cliff Walk, rendering them both liable under the “malicious and willful” exception. Finally, he argued that the Society’s charge for admission to the Breakers also included admission to the Cliff Walk. The Supreme Court held that the Society cannot be liable under the recreational use statute, rejecting each of the arguments put forth by Berman. The court also found that even without the application of the recreational use statute, under basic negligence common law, the Society owed no duty of care because the Cliff Walk is a public easement, much like a street, for which it bears no responsibility. Finally, the court reversed the trial court and held that the suit against the city could proceed because the city’s knowledge

33. Berman v. Sitrin, 991 A.2d 1038 (R.I. 2010). [http://tlc.lta.org/clearinghouse/documents/32032]

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of previous accidents on the Cliff Walk were substantial enough to invoke the “willful or malicious failure to guard or warn” standard. In particular, the court held that “malicious” in the context of the statute means “[s]ubstantially certain to cause injury,” and was not akin to the criminal common law definition connoting evil intent. This case bears reading for all land trusts and their risk management teams. The opinion is instructive in discussing both why the Society was not held liable and why the city was. On a basic level, the case is a reminder that even strongly worded recreational use statutes do not guarantee immunity. The court’s broad interpretation of the word “malicious” is especially note- worthy and could have widespread implications for landowners if adopted in other jurisdictions.

Your land trust can minimize the risk of liability for harm occurring on land trust properties through careful monitoring and documentation. Look for any dangerous conditions that could lead to injuries on property that you own in fee simple. Land trusts should take care when constructing any obstacle that is potentially hazardous and should exercise reasonable precautions when bringing visitors onto a property. Liability for injury on property depends on the facts of each case and will vary from state to state. Be sure to have your lawyer explain your particular state’s laws to you. On annual monitoring visits of conservation easements, ensure that everyone exercises care when on the property and takes reasonable precautions so as to avoid injury and to avoid property damage. As a courtesy, a land trust could inform landowners of any hazards on the property, especially ones where a landowner might attempt to shift the responsibility for any injury to the land trust. Be sure to document the notice.

44 MANAGING RISKS AND THE COSTS OF LITIGATION Anticipating the Costs of Litigation

Anticipating the Costs of Litigation

Preparing Your Land Trust

It is no secret that going to court is expensive and time-consuming, so land trusts must prepare to meet these costs. Often, up-front spending on dispute prevention or resolution strategies and on building a legal defense fund can help a land trust save money down the road. Worthwhile up-front expenditures include the costs of:

• Equipment (camera, GPS, GIS) to monitor properties • Travel to visit landowners • Experts, such as foresters, wildlife biologists, appraisers and legal counsel, to assist with problem solving • Staff and volunteer time to document, investigate, negotiate and resolve a violation • Title work, recording fees, permit fees and other out-of-pocket expenses • On-the-ground remediation for physical damage • Community or neighborhood meetings and other outreach events • Mediation

In addition to the costs above, expenses will dramatically increase if the dispute requires litigation. The additional costs during litigation include:

• Attorneys’ fees • Experts’ fees • Court reporter’s fees • Transportation fees • Discovery depositions and evidence collection • Court costs and filing fees • Copy charges

45 MANAGING RISKS AND THE COSTS OF LITIGATION Anticipating the Costs of Litigation

Estimating Total Costs

The potential cost of litigation depends on many factors, including the lawyer’s fee structure, the area of law, the complexity of the case, the court where the case will be heard, the number of plaintiffs (those bringing suit) and defendants and the geographic location of the trial. For example, attorneys in urban areas generally charge higher hourly rates than attorneys with suburban or rural firms. Also, some attorneys will charge higher rates for time spent in court, as opposed to time spent in the office. Another factor that may increase costs is the demeanor and resources of the other parties. For example, a case may be more costly with landowners who have substantial financial resources and the ability to pay for protracted litigation despite having a weak claim or defense.

Paying the Bills

Legal Defense Reserve To pay for large, unexpected legal expenses, your land trust should establish a legal defense reserve. You should regularly budget money for the legal defense reserve by putting money in a special account that will only be used to address legal issues that arise from time to time. Taking this important action

In 2008, the Land Trust Alliance released a risk the occasional “catastrophic” challenges that assessment report conducted by professional cost anywhere from $200,000 to $1,000,000.* consultants who collected and analyzed data The estimated litigation cost of defending a on the cost of legal challenges involving land conservation easement in a routine challenge trusts and violations of conservation ease- could cost a minimum of $35,000 if the case ments. According to the report, the average were decided on summary judgment, $50,000 cost was approximately $37,605 for all chal- if it went to trial and $50,000 for an appeal in lenges, including those resolved voluntarily. either case. However, that number is low compared with

* Land Trust Alliance & Betterley Risk Consultants, “Conservation Defense Insurance: An Analysis of Historic Data Relating to Easement Violations, Land Protection and Defense Insurance Feasibility,” pp. 18–22 (2008). [http://tlc.lta .org/library/documents/689]

46 MANAGING RISKS AND THE COSTS OF LITIGATION Anticipating the Costs of Litigation

is a proactive way to protect your land trust’s financial security even before a conflict arises. Once you have an established a reserve, your land trust can avoid tapping resources budgeted for other important activities when legal challenges arise.

Types of Insurance Coverage and Insurers For an organization with comprehensive insurance coverage, state law imposes on insurers a duty to defend the land trust. There are a number of different types of insurance that cover different aspects of land trust work or personnel. The Land Trust Alliance recommends that all land trusts carry at least general liability insurance and seriously consider insurance for directors and officers, volunteer insurance and title insurance. None of these insurance products will pay for a land trust to initiate a lawsuit; traditional insurance only pays to defend the land trust if sued under certain circumstances. General Liability Insurance. General liability insurance covers lawsuits against the land trust for negligence. It is the bedrock insurance that every land trust should have. Properly designed, it protects the land trust and its board, officers, employees, members and volunteers. It covers the vast majority of liability claims with which land trusts are concerned, including bodily injury, property damage and personal injury (including some SLAPPs, libel and slander, false arrest, malicious prosecution and invasion of privacy). Directors and Officers Insurance. Directors and officers (D&O) insurance covers breaches of fiduciary obligations by the land trust board and staff. A good policy can also cover the corporation and volunteers. This insurance is supple- mental to, and not a replacement for, commercial general liability insurance. D&O insurance covers “wrongful acts,” such as poor business judgments, errors, omissions, misstatements, breach of duty and interference with another’s business, sometimes even discrimination. Unpaid board members of land trusts may have some coverage available under their individual homeowners or personal liability umbrella policies. These policies generally limit coverage to the individual board member and should not be considered a substitute for either general liability or directors and officers insurance in the name of the nonprofit entity. Some board members will not serve without D&O insurance,

47 MANAGING RISKS AND THE COSTS OF LITIGATION Anticipating the Costs of Litigation

and if a land trust indemnifies its board members from liability, it needs this insurance to cover its potential risk. Each board member should consult with his or her own insurance company to determine if there are situations in which their individual policies might provide coverage. Volunteer Workers Accident Insurance. Volunteer workers accident insurance is the typical death/dismemberment/medical policy insuring volunteers while on land trust business. Like auto insurance, medical coverage is something volunteers are likely to have on their own, but volunteer workers accident insurance pays benefits in addition to any comparable coverage they may have. This coverage is not essential, but it is typically inexpensive and a way to let valuable volunteers know the land trust cares. Title Insurance. Title insurance protects the purchaser of land against loss if there are defects in the title to a parcel of real estate. Title insurance generally excludes items on the ground (for example, the location of improvements and utilities, the relationship of the property to adjoining land, whether any encroachments exist and so on), unless the survey exception is deleted, and usually excludes landowner compliance with the conservation easement. Title insurance does compensate the land trust if the actual title to (ownership of) the conservation easement is challenged or if there is a dispute about the legal description of the property, provided that it is not excluded by the survey exception. For more information about title investigation and title insurance, see chapter three of Acquiring Land and Conservation Easements. [http://learn ingcenter.lta.org/ltalrn/land_protection/acquiring_land_and_ces/] Terrafirma Because the potential costs of defending an easement or fee property can be expensive and because failure in a trial can create bad headlines and bad case law affecting all land trusts, in 2011 the Land Trust Alliance formed Terrafirma Risk Retention Group LLC to help land trusts defend their conserved lands from legal challenges. Owned by its members, Terrafirma insures the costs of upholding conservation easements and protecting fee lands held for conservation purposes when they have been violated or are under legal attack and provides information on risk management to member land trusts. This is the first far-reaching, national initiative to ensure the permanence of conservation undertaken by the land conservation community. The insurance program is a

48 MANAGING RISKS AND THE COSTS OF LITIGATION Anticipating the Costs of Litigation

risk retention group, a mutual insurance arrangement whose business is limited to insuring its members, all of which are members of the Land Trust Alliance. Depending on the type of coverage, liability insurance usually starts to cover the costs of liability either (a) after a lawsuit has been initiated or (b) after a court has ordered your land trust to pay damages. Terrafirma is different in that it starts to cover the costs of liability when the violation on the property occurs—and will even pay to initiate a lawsuit when conservation values and public interests are threatened. This is because the land trust’s liability starts when the conservation values are threatened—not when the trust is sued or when a court orders someone to pay damages. Land trusts invest a great deal of time, money and energy in protecting conservation values. It makes sense for land trusts to want to protect their investment and the public benefit. Sometimes, other insurance policies might cover a portion of a legal challenge that is also covered by Terrafirma. For example, property owners insurance might cover the damage committed by a trespasser but not a suit against the trespasser to stop the activity. In these situations, a land trust may want to use all the available insurance to cover the entire spectrum of risk. Terrafirma fills gaps in coverage that these other insurance products do not cover and provides coverage for legal fees when a land trust must initiate a lawsuit. However, it is important to remember that Terrafirma does not replace other types of insurance, and general liability insurance is required in order to be eligible for conservation defense insurance. Terrafirma does offer a significant layer of protection from risk exposure not covered by other insurance. To the extent that other insurance policies do provide coverage, policy holders must use those resources first to address claims. The Terrafirma staff attorney will address conflicts among policies and legal representation on a case-by-case basis. There are a number of benefits to conservation defense insurance. For example, if your land trust drains its stewardship fund to pay legal fees, then your land trust may need to find alternate funds to continue your annual routine stewardship activities. Insurance would insulate your land trust from these risks and give you financial certainty about your land trust’s exposure to litigation. Of

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course, you will still need funds for ongoing stewardship costs and the annual costs of insurance deductibles and exclusions. Conservation defense insurance will also help donors, lenders, regulators and legislators have confidence in your land trust’s ability to uphold conservation permanence. For more information about Terrafirma and to view the application and insurance policy, see the Terrafirma website. http://www.terrafirma.org[ ]

The Insurance Company’s Obligations But what is the insurance company’s obligation to the land trust? The simple answer: It depends on the type of policy. A policy is basically a contract where the insurer agrees to cover the insured under certain conditions. In general there are three types of policies. These policies can be differentiated by what clauses they contain or omit in their policy language. The types of liability insurance can be broken down into the following categories:

• D uty to defend. This policy contains a “duty to defend” clause establishing coverage as soon as the insured needs to be defended against a lawsuit. “Duty to defend” language is routinely part of most policies. The clause states that, in the event you have a claim against you for an alleged wrongful act, the insurance company providing coverage at the time has the right and duty to defend the claim, even if it is groundless, false or fraudulent. Therefore, although the claim lacks merit and may not ever touch upon an area covered by the policy (such as the negligence of an officer), the carrier still has an obligation to defend the claim if it appears that it might. The duty to defend ends when the insured has used up the applicable limit of insurance in the payment of judgments or settlements. • Indemnity. This policy contains an “indemnity” clause establishing coverage for any costs after the fact. An indemnity policy states that it is your responsibility—not the insurance company’s obligation— to defend a claim when one occurs, but the insurance company will reimburse your covered costs. Typically, this coverage is of a lower

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level because, if the claim lacks merit and never touches upon an area covered by the policy, the insurance will pay nothing. • G eneral liability. This third category is for policies that have both a clause to indemnify and a clause establishing a duty to defend. General liability policies have a duty to defend and a separate duty to indemnify. Because the carrier has the obligation to defend, the carrier also has the right to select legal counsel. In some cases, an insurance company may allow the insured to use its preferred counsel, but generally this arrangement must be preapproved before a claim occurs. Many carriers use “in-house” counsel or panel counsel, which the insurer has approved in advance. In a general liability policy, the defense costs do not erode the liability limit. The insurance company covers defense costs independently of the policy’s liability limits. Typically, the insurance company will not cover any legal fees incurred by the insured prior to tendering the defense of the suit to the insurance company.

The distinction between the three types of policies is important because it determines who takes the lead on a lawsuit and who has the ultimate decision- making authority in settlements and case management. Be sure you understand what role the insurance company has for each of your insurance policies. Most policies are duty to defend.

Special Issue with D&0 Policies The language found in most D&O insurance policies explicitly states that there is no duty to defend. It is the insured’s responsibility, not the insurer’s responsibility, to defend the claim. However, the insured must still get approval from the carrier prior to incurring any costs. It is important to obtain the carrier’s approval of the law firm you intend to engage and to be clear on what defense costs the carrier will approve. Most policies define defense expenses as “reasonable and necessary legal fees and expenses.” “Reasonable and necessary” is not defined in the policy, but most carriers will advise the insured of the maximum hourly rate they will pay. The carrier will not reimburse the insured for rates

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above what has been approved. Therefore, even though the carrier may not have a duty to defend, the insured can neither ignore the above policy language nor hire counsel at a rate higher than that approved by the carrier and expect to be reimbursed. Even if the insurance company doesn’t have to defend you (or won’t defend you), you still must follow its rules and payment guidelines prior to its decision about coverage, otherwise your failure to follow those rules may automatically disqualify your land trust from coverage. Many carriers also give the insured litigation guidelines that outline what they consider to be reasonable expenses or billable activities. For example, a carrier may provide a per-page copying charge maximum or specify that only one attorney from the firm can attend depositions. Share these guidelines with your defense counsel. At the very least, land trusts should use the guidelines when reviewing the defense counsel’s invoices so that you can challenge inap- propriate charges. Unlike general liability policies, D&O insurance policies have “defense within limits provisions,” so that all defense costs incurred by the carrier in defending the insured against a claim under the policy reduce the policy’s coverage limits. This means that the payment of the lawyer’s fees and other costs reduces the amount available under the insurance policy to pay any damages awarded if the land trust loses the case. The insured must pay the litigation fees until the amount of the self-insured retention (the deductible, for example) is exhausted. Do your homework! D&O policies are very different from the standard general liability policy and can vary substantially among carriers. Make sure you understand the material terms and conditions of the policy so that you can abide by them and know what to expect.

Additional Methods of Providing for Conservation Defense In addition to creating a legal defense reserve, effective conservation defense involves the simultaneous use of many methods. Some to consider include:

• A letter of commitment for pro bono legal services from a reputable lawyer in the case of a violation or legal action • Support from your state Attorney General in states where the office will provide direct assistance in the case of legal action

52 MANAGING RISKS AND THE COSTS OF LITIGATION Anticipating the Costs of Litigation

• Fundraising plan with actual pledges of specific amounts in the event of a violation or legal challenge • Knowledgeable legal counsel on staff or on your land trust’s board • Access to an attorney pool or a regional attorney network • Conservation easement co-holding arrangements • Third-party or backup grantee easement interest holders that have a duty to defend the easement • Title insurance for all easement acquisitions (not just purchases) • Directed mediation in the event of a legal action (to mitigate some legal expenses) • Pooled legal defense with other land trusts

Each of these options presents its own unique set of challenges. If your land trust lacks sufficient funds to fully fund an enforcement action, you should have a fundraising strategy and a board policy for committing funds to this purpose. The defense preparedness options above can supplement your land trust’s stewardship funding and serve as an intermediate step to securing permanent funding.

53 PART TWO Hiring and Working with an Attorney

When to Hire an Attorney

It may be tempting to wait on consulting an attorney until your land trust is served with a lawsuit or until matters have deteriorated to such an extent that a lawsuit seems inevitable. However, waiting until late in the process will leave your attorney scrambling at the last minute to learn the details of the case and research the relevant case law. Also, having an attorney’s advice earlier in the process may help your land trust avoid simple pitfalls—such as failure to give adequate notice, failure to gather necessary evidence and documentation or failure to note critical conflicts of interest—that may become serious obstacles to success later on. Your land trust should consult an attorney as early as possible and before a dispute gets out of hand. Legal action can prevent some damaging conduct— you don’t always have to wait for it to evolve into a major problem. For example, if bulldozers are rolling, an attorney can assist you in obtaining a restraining order or an injunction to halt them, but it’s better for all parties involved if you can stop the proceedings before bulldozers are dispatched. When not facing an emergency, your land trust should seek legal advice when you have:

• Documentation of a violation • A preliminary assessment of which easement provisions have been violated • Support from your board, if necessary

54 HIRING AND WORKING WITH AN ATTORNEY Finding the Right Attorney

• If you receive any notice or suggestion of a legal action against the land trust

If the situation is complicated—for example, a violation is not clear or emotions are running high—obtain legal advice earlier. A land trust may make critical errors in litigation strategy, risk management and early dispute resolution if it does not have a competent attorney to represent it. It is worth the money to establish a relationship with a competent litigator before you face legal challenges so you have a trusted legal advisor with no conflicts of interest to turn to when a challenge emerges. You should not use the same attorney who drafted the conservation easement because it is impossible for that attorney to be dispassionate about the challenge and easement interpretation. There also may be a conflict in using the same counsel who drafted the easement (or other legal document) if that particular provision becomes the subject of the dispute. Attorneys who are land trust board members should also not represent the land trust nor give legal advice, but attorneys on the board can provide volunteer support to the outside legal team, which can greatly reduce the costs of dispute resolution.

Finding the Right Attorney

There is an attorney for every kind of legal service. Lawyers can draft documents, negotiate disputes, structure transactions, give general advice, assist with mediation and represent you in court. The trick is finding an attorney with the right combination of expertise needed for you to prevail. Above all, there are three critical qualities you must look for when hiring an attorney. He or she must:

1. Not represent others having interests contrary to those of the land trust without your written consent; 2. Provide expert advice based on relevant experience and training with appropriate competency in the specific area of law in question; and

55 HIRING AND WORKING WITH AN ATTORNEY Finding the Right Attorney

3. Refer your land trust to an expert, as necessary. If the attorney does not have expertise in a certain area (such as tax or criminal law), it is generally better for the attorney to refer you to a competent attorney within that area of specialization.

Ideally you want a lawyer who is both an expert in the matter at hand and familiar with land trusts and the unique array of law inherent in conservation. If you are unable to find a lawyer with all those skills—and there are not many litigators who also understand conservation—your best course is to hire a lawyer with the expertise you require and educate him or her about conservation. Be very clear about your budget realities and mission priorities. Be sure to ask for a significant discount as a tax-exempt charity. Land trusts often deal with real estate and transactional attorneys. These attorneys have expertise in laws governing the purchase and sale of real estate, such as homes, businesses, farms, woodlands and conservation easements. However, if you are unsure of your current legal situation, you may want to meet with a general practice attorney. General practice attorneys are similar to general practice doctors; they will help you if possible, and if they cannot they will refer you to a specialist. The following is a more detailed list of the types of attorneys who could be helpful to your land trust depending on the situation. Note that many lawyers have more than one specialty or may be able to call on partners or associates when specialized skills are necessary.

Real Estate Lawyer

A real estate lawyer manages transactions and disputes related to the purchase and sale of buildings and property, boundary line disputes, zoning and other land use regulations, mortgages, leases, financing of a subdivision and title insurance.

Transactional Lawyer or Business Lawyer

A transactional attorney is an expert in contract negotiation, drafting and administration of business documents, such as employment contracts, partner- ship agreements, acquisitions and debt collection.

56 HIRING AND WORKING WITH AN ATTORNEY Finding the Right Attorney

Litigator

A litigator or trial lawyer represents clients in trials and appeals by preparing and presenting the arguments and evidence, examining witnesses and arguing in court. The litigator’s objective is to persuade the judge or jury that your view of the case is correct. The litigator should also be prepared to advise you on the strengths and weaknesses of your case and to assist you if a negotiated or medi- ated settlement will be more to your benefit than a drawn-out and expensive trial.

Tax Lawyer

A tax lawyer may help your land trust with its nonprofit status, assist with procedures for accepting donations and address other state and federal tax issues.

Environmental Lawyer

An environmental lawyer may be necessary if you have a dispute involving endangered species, development of a wetland area, pollution or other brownfield issues.

Criminal Lawyer

You may need a criminal lawyer if something illegal occurs on your land trust property, such as dumping or logging, trespass, drug use or theft. Consulting a criminal lawyer in such instances may help your land trust better understand the criminal system and your available options. The case may involve a city or state prosecutor to determine criminal liability and punishment, such as jail or fines.

Probate Lawyer

A probate lawyer assists clients in estate planning and proving (“probating”) and implementing a will or trust. If you or any other interested party need to go to court for the enforcement of a will or trust, a probate lawyer can assist in determining how the decedent’s assets will be distributed according to his or her wishes.

57 HIRING AND WORKING WITH AN ATTORNEY Finding the Right Attorney

General Practice

A general practitioner practices a broad range of legal disciplines, such as business law, real estate law, wills, family law and other fields. A general practitioner might be the best first stop for a land trust without a staff attorney. The general practitioner can advise you about when you need a specialist attorney.

Mediator

A mediator may or may not be a lawyer. Mediators act as intermediaries between two or more disputants. A mediator assists the parties to reach an agreement if possible. Mediators may not be aware of the details of your specific dispute or the specific laws at issue, so you may need to educate them. Your lawyer may recommend that you try to mediate a dispute and may advise you in locating an appropriate mediator and assist you in presenting your issues to the mediator. Many conservation easements contain alternate dispute resolution language where mediation is the first remedy of choice if there is a dispute.

Where to Find an Attorney

One of the best ways to find a lawyer is by asking trusted friends, family or professional contacts to identify lawyers with whom they have worked successfully in the past. In some areas, a local bar association can refer you to an attorney who has a reputation for taking similar cases. You can usually find these local bar associations by contacting the clerk at your local courthouse or by contacting your state bar association. The Yellow Pages and the Martindale- Hubbell Law Directory, found in many public libraries, are good print resources. The Internet is another great resource for finding an attorney. The following is a list of online attorney locator resources:

• Land Trust Alliance attorney locator [http://clearinghouse.lta.org/ attorneys] • Lawyers.com [www.lawyers.com] • FindLaw [www.lawyers.findlaw.com] • Martindale.com [www.martindale.com]

58 HIRING AND WORKING WITH AN ATTORNEY Finding the Right Attorney

• Avvo [www.avvo.com] • AttorneyPages [www.attorneypages.com]

The Perils of the Board Member Attorney

Many land trusts have one or more attorneys on their board, possibly with the thought that because the land trust cannot afford an attorney the board member can provide free advice. While this perspective is understandable, especially for new or small land trusts, there are six reasons why this practice can cause problems.

1. As a board member, the lawyer is not acting as the land trust’s lawyer but as a leader of the organization with a duty of loyalty to the land trust. Therefore, the same professional obligations that a lawyer has when advising a client do not apply. For example, a lawyer who is advising a client has ethical duties under the rules passed by the state bar association that dictate the standards of practice in that state— these duties involve zealous representation and competence. As a board member, however, the lawyer has a duty of loyalty, rather than zealous representation. The board member’s duty of loyalty to the land trust may give rise to obligations different from those of the lawyer hired to represent the land trust and protect its legal interests. For example, an attorney will not be able to represent the land trust at trial if a board decision in which he or she participated in as a board member is subject to litigation. Lawyer codes of ethics do not permit an attorney to represent the entity in litigation in such a situation. 2. Because of the loyalty between the land trust and the board member, the land trust will not be able to hold the lawyer board member accountable for his or her actions in a malpractice suit or a state bar association complaint, nor can the board fire the lawyer board member if the advice proves bad or if personalities interfere with professional actions. 3. Lawyer board members may not be experts in the specific area that the matter requires. If they do have the expertise, then they can

59 HIRING AND WORKING WITH AN ATTORNEY Finding the Right Attorney

best serve in a supporting role by acting as the liaison with the paid outside attorney, by helping the board collect records and by identifying issues to discuss with the outside attorney. 4. The lawyer board member is likely to have strong personal opinions about the matter that may possibly conflict with the best, most objective professional advice in the matter, and he or she may be unable to separate emotions from independent advice. The remain- der of the board may not be confident that the lawyer board member is giving dispassionate advice or, conversely, may rely on that advice without sufficient scrutiny. 5. Using a lawyer board member may nullify the protections of the attorney-client privilege because the lawyer and the client are not separate. Nullification depends on the capacity in which the lawyer is asked to give advice. All confidential communications made to a client by a lawyer are protected if that lawyer has acted in a legal rather than a business (or, in this case, board member) capacity. It can be very difficult to differentiate when the same person is acting in both capacities. You don’t want to be forced to turn over confidential conversations and memos to the opposing party. 6. Other conflicts of interest can arise regarding decisions on payments to either the law firm or the lawyer, even for out-of-pocket expenses, on contracts or if individual board members are named in a lawsuit, including the lawyer board member. For example, a board may have erred and that error may contribute to the lawsuit. The lawyer board member may have inadvertently made decisions based on a conflict of interest or a personal bias that could be construed as ill intent. As a party to those decisions, the lawyer board member is not in a position to admit the error or to assist the board to rectify it. As an interested party, this board member cannot be objective, nor can the board member render any further advice because prior actions are now the subject of a dispute. At a minimum, the other board members may lack confidence in the lawyer board member’s ability to separate personal interests from the best interests of the land trust.

60 HIRING AND WORKING WITH AN ATTORNEY Interviewing Attorneys

If, after careful consideration of all the risks and benefits, your land trust decides to use a board member as pro bono legal counsel, then your land trust board must take appropriate steps to preserve attorney-client privilege and manage conflicts of interest. You might review these ideas with your outside counsel:

1. Differentiate between legal advice and board-related duties, prefer- ably through separate communications 2. Document the lines between actions and opinions as a board member and the legal advice provided as land trust attorney 3. Render legal advice in writing on the law firm’s letterhead 4. Designate one staff person or the board chair as the sole requestor of legal opinions 5. Label documents to reflect confidentiality, identify privileged material and specify that the attorney is acting as the land trust attorney, not as a board member 6. Follow written procedures to protect confidentiality and privilege of legal communications 7. Follow written document retention policies and procedures

Be sure to identify and document the capacity in which the lawyer gives advice. As the lawyer’s client, the land trust should clearly document in the minutes and in all communications between itself and the lawyer board member that the communications are privileged. Be certain that the record clearly indicates that the lawyer acted only in a legal professional capacity and not in a business capacity (i.e., as a board member). The best practice, however, is to avoid using attorney board members for legal advice and to secure outside counsel.

Interviewing Attorneys

It is prudent to interview one or more attorneys before hiring one. This helps avoid inadvertent errors. Your attorney is in the best position to respond to all of the deadlines in a timely manner. If your attorney misses a statute of

61 HIRING AND WORKING WITH AN ATTORNEY Interviewing Attorneys

limitations deadline or fails to include a specific claim in the initial complaint or a specific defense in the answer to a complaint, you may not be allowed to pursue that claim or make that defense later with a replacement attorney. In addition, changing representation in the middle of a case creates extra costs because the new attorney will need to take time to review the case, conduct his or her own research and interview any staff or witnesses who have information. Finally, shopping for a new attorney when you already have an attorney can create conflict and may lead to your attorney withdrawing representation. Thus, it is wise to make sure you have the right representation from the very beginning. When interviewing an attorney, you should also come to the meeting prepared with a list of questions. Below is a list of questions to help guide your search for a lawyer or law firm in case of litigation. Answers to some of these questions may be available on the attorney’s website. For other questions, you will need to ask the attorney in person.

• Are you admitted to practice law in the appropriate state for the matter? • What is the statute of limitations for this type of case? • Are you a partner or associate in a law firm? How many partners and associates does the firm have? What are the firm’s areas of specialization? • Please explain your law practice in general. What types of cases do you typically handle? • Do you specialize in a particular area of practice? If so, what area(s)? • How many conservation easement transactions have you participated in and what was your role? (For example: Have you provided a title opinion? Reviewed an easement? Drafted and negotiated an easement from beginning to closing?) • Do you know how conservation easements are valued in an appraisal? • Have you ever represented a land trust? • Have you represented landowners in donations of land, in partial interests in land or in qualified conservation contributions?

62 HIRING AND WORKING WITH AN ATTORNEY Interviewing Attorneys

• Have you engaged in both litigation and mediation? • In what capacities and how often? • Are you familiar with §170(h) of the Internal Revenue Code and the accompanying Treasury Regulations?

If the attorney answers these preliminary questions to your satisfaction, provide details of your situation and pursue these more specific matters:

• If your land trust is in an area where public agencies fund the purchase of conservation easements, then questions specifically related to the purchase of development rights (PDR) might be appropriate, such as: Are you familiar with the PDR program administered by the local or state agency? • How many cases like ours have you handled? What was the result? What were the similarities and differences? How long did the case last and do you expect our case to last the same amount of time? • How likely is it that the possible violation will end up in court? • Who will do the work, you or another person? Who will negotiate? Who will litigate the case if it goes to trial? • How will you work with our land trust? How do you see your role in negotiations? How will you communicate with the landowner’s attorney? • What assistants do you use (associates, paralegals, investigators, administrative assistants)? What are their roles? • Whom will you consult if you are uncertain about certain aspects of the case? Will there be additional fees for such consultation? • What if we are not happy with a settlement that you ask us to agree to? • How will you keep us updated on your communication with the other party and the progress of the case? • How long do you expect it will take to resolve this matter? • How do we contact you, and what do we do if you are not available? Who else should we talk to about questions related to our case?

63 HIRING AND WORKING WITH AN ATTORNEY Interviewing Attorneys

Paying for Legal Services

Retainer: A retainer is a small advance payment When considering payment for legal services, to ensure representation for legal services. keep in mind that a lawyer cannot guarantee A retainer is typically used for an organiza- that the case will be won. Much of an attor- tion that needs frequent legal advice. ney’s work is done when the client is not pres- Contingent fee: A contingent fee is an arrange- ent (for example, legal drafting, negotiations ment where the lawyer gets paid only if he and trial preparation). Also, the hourly fees or she is successful in court or favorably paid to attorneys are not only for their work settles out of court. The payment is usually but also for office overhead, such as office a percentage of what the client is awarded space and administrative costs. in court (a percentage of the recovery). Other expense-related issues and questions Court costs and out-of-pocket expenses are include: usually the client’s responsibility, regard- • Is there an absolute maximum fee? less of recovery. Contingent fees work best • What if there are unexpected expenses? when the land trust is a plaintiff because • How will you keep us updated about the defendants don’t usually get recovery, cost? even when successful. • What do we have to pay if we lose the Specific job:An attorney may be able to give case? an approximation of the price based on the • What about payments to experts? specific job being done. For example, for a Appraisers? purchase and sale agreement for a specific • What do we have to pay up front? property or a title examination, the attor- • What other expenses can our land trust be ney may be able to give an approximate expected to pay (for example, copies, fax price in advance. transmissions, long distance calls, travel Hourly: Fees can also be a fixed dollar amount expenses)? How are those calculated? for each hour worked. The lawyer should • Do you provide pro bono or discounted estimate the number of hours expected to services for nonprofit organizations? complete the case. Pro bono: Services that a lawyer or law firm provides free of charge or at a reduced fee, as a matter of professional or community service.

64 HIRING AND WORKING WITH AN ATTORNEY What to Expect

• What is your office policy on returning phone calls? How much time should we wait before expecting a call back? • How do you charge your clients? A retainer, contingent fee, specific job or hourly rate?

While it may not be necessary to ask all of these questions at once, knowing the answers to these questions early in the lawyer’s representation can ensure that the representation runs smoothly. You do not want to be surprised with high bills for services that could easily have been carried out by support staff with a lower pay grade, or with outdated news of the status of your case because the attorney did not share information with you, or with news that the statute of limitations passed and your case was not filed in time.

What to Expect

The Original Interview

Your first impression of an attorney will likely be formed by your initial visit to the office for an interview. In addition to your prepared questions, consider the courtesy of the lawyer and staff at the firm. If you feel your time is unimportant to the lawyer, it may be an indication of how the office will respect your needs later.

The Second Visit as a Client

After interviewing several candidates and deciding on a lawyer who best fits your needs, arrange an appointment for a second visit. During the second visit, you should develop a contract or engagement letter with the attorney and explain your dispute in detail. Bring relevant documentation and a prepared summary of the dispute, as well as any questions you may have. After the lawyer knows the specifics of your case, consider asking:

• What are the weaknesses of our position? What are our strengths? • What alternatives do we have in approaching a resolution with the landowner?

65 HIRING AND WORKING WITH AN ATTORNEY What to Expect

The Contract or Written Fee Agreement

This agreement (sometimes known as an associates. Rates in smaller communities engagement letter) will formalize your rela- and smaller firms may range from $200 to tionship and determine the duties for both the $500 per hour. attorney and your land trust. Each party should • Costs and expenses. Determine how addi- sign the agreement and keep a copy for future tional costs, such as the filing fees, court reference. As a matter of normal operations costs, photocopies and shipping, will be and good ethical practice, law firms prepare handled (as a separate, itemized charge or these agreements for their clients, but they as part of the lump fee). You should also can be negotiated. agree on how to calculate those charges. Each contract or fee agreement should • Statements. Establish when and how you contain the following: will receive bills, the time for payment and • Scope of work. Decide the actual services what to do if you cannot pay a particular you authorize your attorney to perform. statement in full. • Duties of attorney and client. Include the • Discharge and withdrawal. Establish whether responsibilities you will assume and the you want to include an opt-out clause in expectations you have for your attorney. the contract and determine under what For example, duties of the attorney may conditions you can withdraw from the include informing you of progress on a contract. weekly basis and responding to commu- • Termination or conclusion. What happens nication within 48 hours. Be sure you are after your issue is resolved? How do you comfortable with your assumed responsi- know when it is resolved? bilities. For example, your responsibilities • Deposit. Establish whether you are required will likely include paying bills within 30 to to place a deposit on the attorney’s 60 days of receipt, providing documents services and, if so, how much. and attending depositions as necessary. • Insurance. If insurance is paying for your As the client, the land trust should set the fees, arrange those terms in advance with tone of the case. the attorney and the insurance company. • Billing rates. Review other attorneys’ rates • Commencement of services. Indicate the in your area to determine an average specific date your attorney will begin work hourly rate. Attorneys’ rates depend on and make sure that the preliminary consul- the attorney’s experience, the location of tations are not part of the fees. the firm and the nature of the practice. In • Contact information. Make sure you have the general, the larger the firm and the larger contact information for your attorney and the city, the higher the fees. In 2012, hourly any assistants. Be sure you provide your rates for partners in a medium to mega- attorney with the land trust’s contact infor- sized urban firm typically range from $300 mation, including the point person, the to more than $1,000 per hour for a part- media contact and an additional backup ner and from $150 to $800 per hour for person. HIRING AND WORKING WITH AN ATTORNEY Practical Pointers on Managing Attorneys

• If there are available alternatives, what would a court think of each alternative? • Is our plan of action measured proportional and appropriate? • Are there other legal options available in this situation? • What are the possible remedies available? • What are our chances of success?

Practical Pointers on Managing Attorneys

Remember that the attorney is working for you. You are in charge. The attorney provides your land trust advice and representation, but you make the decisions about what is best for your land trust. Your land trust is responsible for managing the attorney, asking the right questions, insisting on the highest ethical standards and setting the tone for the dispute resolution. For the most productive relationship with your attorney, you should:

• Be honest. Your attorney cannot operate without all of the relevant information. Be honest about your land trust’s priorities and expectations for the resolution of the dispute. • Be organized. Use your attorney’s time efficiently. Come to meetings prepared with questions and any documents that may be relevant to your dispute, which will save you time and money. Keep an organized file of court documents and letters and e-mails from your attorney. Also, keep a file of your expenses, such as the lawyer’s bills, court costs, expert fees and records of payments. If you feel you have been overcharged, let the lawyer know before you pay. Request copies of every document. Keep the file well organized to save time and money. • Stay involved and communicate effectively. Have your attorney give you the positive and negative aspects of your case and keep you informed of progress. Clients who are fully informed may avoid huge problems by solving minor ones early on. You can stay informed by taking notes at meetings and during phone calls, by

67 HIRING AND WORKING WITH AN ATTORNEY Privileged Information

reading contracts and agreements thoroughly and by asking questions as they arise. A common complaint about attorneys is that they fail to return calls or respond to e-mails promptly. Make it clear at the beginning of any engagement that you expect responses within 48 hours. If you have contacted your attorney and don’t hear back in a couple of days, request that an answer be provided by a specific time. Do not wait for a crisis. If your attorney continues to be nonresponsive, find a new one. Be sure to schedule regular updates, especially during the active phases of the work. Track deadlines and make sure your attorneys are paying attention.

Privileged Information

The attorney-client privilege is an evidentiary rule that protects both attorneys and their clients from being compelled to disclose confidential communications between them made for the purpose of furnishing or obtaining legal advice or assistance. The privilege is designed to foster frank, open and uninhibited discourse between attorney and client so that the client’s legal needs are addressed competently by a fully prepared attorney who is cognizant of all the relevant information the client can provide. The attorney-client privilege may be raised during any type of legal proceeding—civil, criminal or administrative—and at any time during those proceedings—pretrial, during trial or posttrial. States have different rules, but privileges usually include communications between attorney and client, doctor and patient and husband and wife. Not all components of the attorney-client relationship are protected by or encompassed within the attorney-client privilege. For example, the existence of the attorney-client relationship and the length of the relationship are not privileged pieces of information. Information such as the date of the communication and the identity of persons copied on correspondence are likewise not privileged. Participants in a meeting with an attorney, the length of a consultation and the documents relating to those meetings (for example, calendars or appointment books) are not necessarily protected from compelled disclosure. As for the fee

68 HIRING AND WORKING WITH AN ATTORNEY Privileged Information

arrangement between an attorney and a client, these documents are typically discoverable, except where such discovery would produce confidential communications with the client. In fact, the general nature of the services performed by the lawyer, including the terms and conditions of the retention, is generally discoverable or able to be made known to the opposing side. Also, a client cannot protect certain facts from disclosure simply by communicating them to his or her lawyer. If information may be gathered from another source besides the privileged communication, then the underlying information itself is not privileged. In other words, the attorney-client privilege protects communications made to obtain legal advice; it does not protect the information communicated. Clients and attorneys alike must bear this important fact in mind: Merely conveying something to an attorney will not prevent the underlying facts from compelled disclosure if they can be discovered from a nonprivileged source. The opposing party has the right to request access to all of your records and—unless you can prove that those records are privileged—will usually get them. Because the attorney-client privilege often prevents disclosure of information that would be relevant to a legal proceeding, courts are cautious when examining objections based on the privilege. Most courts generally require that certain elements be demonstrated before finding that the privilege applies. Although the elements vary by state, courts often follow a five-part test to determine if the attorney-client privilege applies:

1. The person asserting the privilege must be a client or someone attempt- ing to establish a relationship as a client 2. The person with whom the client communicated must be an attorney and must be acting in the capacity of an attorney at the time of the communication 3. The communication must be exclusively between the attorney and client 4. The communication must be for the purpose of securing a legal opinion, legal services or assistance in some legal proceeding and not for the purpose of committing a crime or fraud 5. The privilege may only be claimed or waived by the client

69 HIRING AND WORKING WITH AN ATTORNEY Conflicting Legal Advice

Clients may waive attorney-client privilege expressly by their words or implicitly by their conduct, but a court will only find that the privilege has been waived if there is a clear indication that the client did not take steps to keep the communications confidential. Privileges can be implicitly waived, meaning if you tell someone else the contents of a private discussion with your attorney, you are deemed to have waived privilege and that communication can be shared with the opposing party. An attorney’s or a client’s inadvertent disclosure of confidential information to a third party will not normally suffice to constitute waiver. If a client decides against waiving the privilege, the attorney may then assert the privilege on behalf of the client to shield both the client and the attorney from having to divulge confidential information shared during their relationship. For all of its policy considerations and justifications, the attorney-client privilege has a very real practical consequence: The attorney may neither be compelled to nor may he or she voluntarily disclose matters conveyed in confidence to him or her by the client for the purpose of seeking legal counsel. Likewise, the client may not be compelled to testify regarding matters communicated to the lawyer for the purpose of seeking legal counsel.

Conflicting Legal Advice

It is not uncommon to receive conflicting legal advice because attorneys interpret the law differently depending on their perspectives and the facts and circumstances of the case. When you are faced with different opinions, ask questions! Ask enough questions to illuminate the rationale behind and the distinctions between the apparently conflicting aspects of the advice received so that you can fully assess each side’s merits. This section provides guidance to enable you to make the best decision in light of your responsibilities to the land trust.

70 HIRING AND WORKING WITH AN ATTORNEY Conflicting Legal Advice

Responding to Conflicting Legal Advice

The first step in resolving conflicting legal advice is to communicate with each attorney who provided an opinion. Ask questions and evaluate how they reached their legal conclusions. Consider asking your attorneys the following:

• O n what facts is your opinion based? It is important for the attorney to have all the facts in order to arrive at an educated opinion. One potential source of conflicting advice can be traced to incorrect or absent information about the facts of the case. Provide your attorney with a complete and detailed summary of the situation so he or she can appropriately offer guidance. Include all known parties involved, all relevant property conditions, all current and proposed uses of the property, all known conflicts and any other potentially relevant facts. It is important to consider surrounding facts beyond the situation itself, including the legislative environment, community attitudes, political influences, impact on private property rights and economic costs. Evaluate the impact each action will have on your responsibility as a land trust to uphold public confidence and to support conservation efforts. Discuss with your attorney how these factors might alter the legal opinion provided. • What assumptions have you made about the issue? Similar to the basic facts of your situation, any assumptions should be explicitly communicated. Everyone makes assumptions, whether consciously or not; having a shared understanding is vital to assessing the legal and ethical standards in play. For example, you may assume your attorney is aware that the land trust wants to sue the subsequent owner but has absolutely no desire to disturb the original donor, while in reality the attorney believes he can add the original donor to the suit and have a much better chance of winning a big settlement. Such unrevealed assumptions could be the culprit behind conflicting legal opinions. • What is the governing legal doctrine? Numerous laws affect the operation of a land trust, whether common, federal, state or local law.

71 HIRING AND WORKING WITH AN ATTORNEY Conflicting Legal Advice

All parties should be in agreement about what laws may apply and the potential results under each. Has the attorney considered the impact of a bordering state’s regulations? Is there a model code to consider or rely upon? Has a recent case been decided in this area? Explore all possibilities, because the land trust may have to select one legal opinion based on the strength of the supporting laws or regulations. Further, any experience unique to the attorney, as well as attorney opinions about what the attorney thinks the law should be as compared to what the law states with a neutral analysis of gaps and uncertainties, should be clearly communicated to the land trust. Legal precedent for conservation easements is lacking, and legal theories can be highly susceptible to multiple interpretations. Ensure that each attorney is explaining his or her legal basis and interpretation so the land trust can evaluate the reasonableness of each assessment. Ask whether there is any decided case that says exactly what the attorney espouses.

Further Considerations

If, after all lines of inquiry have been exhausted, the land trust is still faced with conflicting legal advice, consider the following factors when choosing the appropriate legal course of action. First, assess the expertise of the attorneys who have provided the conflicting opinions. A lawyer with expertise in a specific area should have a carefully reasoned response to your question, which may be highly detailed but, at the same time, may ignore larger, overarching issues. A generalist may be able to provide insight into the bigger picture but fail to ask critical questions or recognize the subtleties of an issue. A land use attorney and a tax attorney can both bring valuable perspectives to the table, but be careful in listening to a land use attorney’s advice on a tax matter and vice versa. Consider whether the attorneys could cooperate and utilize a diverse knowledge base in responding to your legal issues collaboratively. Second, consider the risk tolerance (ability to accept negative results) of any particular attorney and how it fits with your land trust’s risk tolerance. If the

72 HIRING AND WORKING WITH AN ATTORNEY Conflicting Legal Advice

attorney has a different risk tolerance, explore what in the law led the attorney to that judgment and apply the organizational risk tolerance analysis to that consideration. Make sure your attorney understands your risk tolerance and risk assessment process and has factored that into any legal opinion provided. The board should have a separate discussion about its own collective willingness and capacity to accept a negative result (risk tolerance).

The Role of the Board in Resolving Conflicting Legal Advice

The board is ultimately responsible for resolving conflicting legal advice. The board members’ duties of loyalty and due care require that they act:

• In good faith • With the care an ordinarily prudent person in a like position would exercise under similar circumstances • In a manner they reasonably believe to be in the best interests of the land trust

When these duties are appropriately exercised, the board can insulate itself from a lawsuit based on the action taken. Any decision about conflicting legal advice must be based on a reasonably prudent assessment of the circumstances. When making any decision for the land trust, carefully consider the land trust mission and its written policies, risk management practices and all the legal advice provided (whether conflicting or not). Fully assess all facts or opinions, even if they may be difficult or unpleasant for the board to discuss. By communicating clearly with your attorney, you enable yourself to make the most well- informed decision possible regarding your land trust’s legal options, while still fulfilling your duties to the organization. Regardless of your attorney’s area of expertise or risk tolerance, ensure that he or she is familiar with Land Trust Standards and Practices. Any legal advice provided should include an evaluation of these standards. While land trusts commit to following them, Land Trust Standards and Practices are not governing law. An attorney should take particular care to consider Land Trust Standards

73 HIRING AND WORKING WITH AN ATTORNEY Multiple Representation Arrangements

and Practices when providing a legal opinion. The attorney should state both the law and the effect that Land Trust Standards and Practices have on additional considerations for a land trust.

Multiple Representation Arrangements

A multiple representation arrangement occurs when an attorney represents numerous clients in the same lawsuit or transaction. Under the ethical rules governing the legal field, such an arrangement is permissible if the attorney reasonably believes he or she will be able to competently and diligently represent each client. An attorney should always consult the specific rules of their jurisdiction to ensure compliance with all ethical rules and laws. (See Rule 1.7 of the American Bar Association’s Model Rules of Professional Conduct.) [http://www.americanbar.org/groups/professional_responsibility/publica tions/model_rules_of_professional_conduct/rule_1_7_conflict_of_interest_ current_clients.html] Each client must give—in writing—informed consent to this arrangement. The attorney may not represent a claim by one client against or adverse to another client. A multiple representation arrangement is an attractive economic option for co-holders of a conservation easement, for example, where it is easy to assume that all parties are working toward the same goals. However, conflicts between the parties may not be obvious until after the joint representation is underway, resulting in difficulty and costs if new counsel is required. In addition to ethical concerns, the board must consider whether this type of arrangement will honor the policies and standards it follows. A land trust should not enter into this type of arrangement without fully discussing potential problems. Prior to entering into any multiple representation arrangements, all parties should consider their interests and their goals and then create a memorandum of understanding or other statement that clearly describes each party’s roles and responsibilities. Such an agreement should also answer some basic questions: How does each party’s interest match with the other potential parties involved? What result is each side seeking? How long do the parties anticipate the lawsuit or negotiation

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will last? What are the ethical standards for each party? Answering these types of basic questions before entering into a representation agreement helps to avoid conflict later on. Land trusts can also avoid these problems by establishing some basic agreements early on. First, if your land trust co-holds conservation easements with another entity, it is worthwhile to draft a detailed memorandum of understanding that outlines the roles and responsibilities of all parties with respect to easement stewardship and enforcement. With that in place, joint representation is easier, although, after writing such an agreement, the parties may realize that they do have distinct interests and perspectives that make separate representation preferable. Even if the parties choose to engage separate counsel, they can still share information and collaborate on enforcement. If the parties’ interests are aligned, there are other types of arrangements that can save resources. One such option is the joint agreement, where the attorneys for separate land trusts enter into a written agreement to coordinate a cohesive strategy. Parties are able to share privileged information, reduce duplicative efforts and potentially save costs. Be sure to consider designating one lead counsel to streamline efforts and create a clear chain of command. The joint agreement can allow withdrawal if common interests ultimately diverge or unanticipated issues arise. The final option available is a hybrid approach, in which all parties have their own counsel. They then jointly select an outside attorney to represent them as a group for the lawsuit or transaction. Similar to a joint agreement, this arrangement allows for streamlined efforts directed through the same channel. The separate counsel ensures that all parties coordinate responses and tactics. This method can be particularly effective where the parties already have in-house counsel. For an in-depth discussion of the ethical considerations of this arrangement, see “Ethical Issues Encountered in Multiple Representation Arrangements” by Gray T. Culbreath in the spring 2010 issues of FDCC Quar- terly. [http://www.thefederation.org/documents/QuarterlyV60N3_Spr10.pdf]

75 PART THREE Managing a Legal Challenge

Knowing what to expect when facing a legal challenge of any size or complexity will help you prepare the best possible proportional response. Very few legal challenges go to court, so you need to be able to manage all legal challenges. Inevitably, strong emotions arise in the course of dealing with any problem. It’s critical that your land trust members control even the most justifiable emotions in order to ensure that they select the best way to achieve the organization’s ultimate objective and not confuse methods with goals. Taking the time to prepare your land trust before a legal challenge is on the horizon will enable you to thoughtfully analyze the situation and prepare a course of action. How your land trust, in consultation with its legal counsel, decides to handle a dispute is a matter of strategy. The most appropriate strategy in a particular case will depend on your land trust’s mission and goals, the facts of the dispute and the law. Depending on the mission, goals and priorities of your land trust, you may decide that a discussion with the landowner followed by written documentation is sufficient or you may end up litigating your case or appealing an adverse result at trial. The facts of your case also affect whether and how to litigate. Some cases hinge on the interpretation of one sentence in one document, while others may involve multiple witnesses, the need for expert testimony and historical records. The law determines who can bring a lawsuit, when and where the lawsuit can be brought and how attorneys and clients advocate for their side. The land trust has an important role throughout the legal challenge: deciding goals, gathering facts, documenting the circumstances, determining the appropriate response

76 Managing a legal challenge Facing Litigation: Lessons from Land Trust Experience

and guiding the tone of the resolution or, if in court, the case presented by an attorney to the court. Ultimately, the land trust board is responsible for overseeing the dispute resolution process, and at a minimum it should be kept informed as dictated by your land trust’s written enforcement policy.

Facing Litigation: Lessons from Land Trust Experience

Of course not every disagreement ends amicably with the land trust and landowner resolving the issue together. The land trust may have to take the landowner to court or it may find itself being sued by an angry landowner. The following tips are distilled from the experience of many land trusts that have been sued by a landowner or neighbor or have initiated court proceedings. They include suggestions on how to prepare for litigation and what to do if you face litigation.

• Be persistent in communicating with the landowner or a neighbor, even a hostile one. As soon as you identify a dispute, be sure to avoid working through intermediaries unless the landowner absolutely refuses to talk with you. Avoid time gaps between correspondences. Be speedy and proportionately forceful in making sure that conversations take place. Allow cooldown time—no more than several days—and then try direct conversation again. Once litigation commences, all communication takes place through the attorneys. • H ave one person manage communication. A designated person—whether staff, board member or volunteer—paying close attention to the situation and managing communications is essential. It is also critical that volunteer organizations control who speaks for the organization. In some cases, the person managing communications will also be the point person for communications between the organization and its attorney. • Have great records. Records can’t be introduced into evidence if they don’t exist. It is critical to get records, such as a baseline documentation report, admitted as evidence. Keep good notes and accurate

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records as the dispute continues. Even contemporaneous hand- written notes showing the landowner’s attitude or specific response when contacted on the phone or in person can be persuasive to a judge. You may have to produce or present hundreds of documents, and the rules of discovery (as well as the Sarbanes-Oxley provisions) prohibit altering or destroying any records either after a legal challenge has begun or once it is suspected that one will start. When requested to produce documents for your opponent’s review, you must turn over what you have—good and bad. Keeping good records that are neatly organized will help you avoid a needle- in-the-haystack search for documents when under the pressure of discovery and trial. • Take immediate and appropriate action. When a violation evolves into a major challenge to the land trust, you need to react swiftly, proportionately and firmly. The land trust cannot be passive or risk allowing the matter to balloon into a much larger problem. Land trusts need to control these situations and protect conservation values without being overly aggressive. These circumstances require careful judgment and use of sound discretion. • H ave a solid damages theory and excellent experts. Another critical component is the damage analysis. Retain independent engineers, appraisers, foresters or other experts as appropriate to visit the land and provide a dispassionate assessment of the damage as well as quantify and model the loss in dollars. Remember that losses to conservation values and damages to the conservation purposes can be difficult to measure. Even though the damage assessment might be low in dollars, the obligation for the land trust to uphold the easement may still be high. • Anticipate litigation costs. Be prepared for litigation costs. Trial costs can run to $70,000, and appeal costs are likely to be similar. One nonprofit insurer estimates that trial costs run between $3,000 and $5,000 per day. Simple cases can take a week, and complex cases a month or more. Pretrial discovery is even more expensive.

78 Managing a legal challenge Facing Litigation: Lessons from Land Trust Experience

• Litigation should always be the last resort. If land trusts are proactive and put enough time and money into prevention, recordkeeping, annual visits and upholding the permanence of conservation— especially with successor owners and new neighbors to conservation easements—litigation and its costs can often be avoided. If, despite such efforts, litigation is threatened, solid preparation may head it off by establishing a strong and reasonable position in formal negotiation or mediation. • Don’t be afraid of a courtroom. If you must litigate, don’t fear the judge and jury. The notion that land trusts won’t be well regarded in court is simply untrue. With effective counsel, credible evidence and a proper explanation, the judge or jury are likely to understand and appreciate the concept of land trusts and the benefit of their work to the community. Don’t sell your land trust short. If protected property has been violated, you’re likely to find a reasonably sympathetic judge or jury. • D on’t settle prematurely. Commit to doing the best you can under the circumstances. Sometimes settlement is preferable, especially if the facts or documents are not entirely favorable to your position and potential litigation costs are disproportionate to what is at stake. But if you are committed to and prepared for litigation, don’t waiver. When an organization has a strong case and a principle to uphold, it is a mistake to settle prematurely. On some issues, a land trust can ill afford to agree to a settlement that will diminish its ability to enforce a conservation easement in the future, and, sometimes, a decision will pay dividends beyond the case by establishing a precedent that will benefit your land trust and land trusts everywhere in similar cases. • Anticipate appeals. Finally, even when the land trust wins on virtually every legal point at trial, a determined and angry owner can and will carry on by appealing the trial court’s decision. Once both sides are engaged and have inflicted the pain of discovery and depositions on each other, and a landowner has incurred significant legal fees

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and other costs, it is very hard to unwind the whole process and end the dispute. A land trust must be prepared for the time and expense that may be necessary to uphold a favorable decision. • Share appropriately with the community. The larger community will usually support the land trust’s actions, especially when you can demonstrate that you attempted to settle the dispute before it reached trial or that the landowner sued you and that you are acting for the community to protect public benefits. Emphasize your responsibility to enforce the conservation easement purposes even if it costs money and creates controversy. • D on’t expect to collect damages. Even if the court awards you some of your attorney’s fees and costs, assuming your land trust won the case, you may not be able to collect any or all of what is awarded. Courts often do not award any fees at all or, at best, may award only a portion of them. Then you have to collect. That may be impossible or too expensive.

Controlling the Emotions

Shock, betrayal, anger, hurt, embarrassment, frustration and fear are some of the common reactions to the news that a landowner, a neighbor or a developer is suing your land trust or a trusted landowner has violated his easement in an egregious fashion that leaves you no choice but to sue. How could they?! When you are working so hard and sacrificing your precious time and energy to do good things for your community, to have someone drain your resources and damage your reputation is hard to accept. It may not happen often, but when it does you need to know how to manage your reactions and help those around you manage theirs, so that you respond effectively and in a way that enhances your conservation mission. You can survive a lawsuit and even thrive by over- coming the challenge in a way that makes your supporters proud and silences your detractors. With adequate preparation, sufficient resources and the right attitude, you can significantly increase the likelihood of prevailing and you can minimize the distraction of the lawsuit.

80 Managing a legal challenge Steps in a Lawsuit

The first step is facing the real possibility that, like many others before you, your land trust might be sued for any number of reasons—reasons that have nothing to do with the quality of your work. When a land trust correctly but regretfully says “no” to a landowner request prohibited by the conservation easement, the landowner may sue the land trust in an attempt to have a court overrule the land trust. Of those cases with reported judicial opinions, landowners almost always lose. Land trusts have also been sued by neighbors and developers who want to use conserved or fee-owned land in a way that is prohibited by an easement or does real harm to the land’s conservation values. Land trusts generally prevail in these cases, too. Finally, land trusts have been sued using an astounding variety of creative approaches by parties seeking to void a bequest, terminate a conservation easement or coerce the land trust into acting in a way contrary to its mission. In many cases when a landowner or trespasser has sued a land trust over conservation land, the land trust was poised to initiate litigation for a violation, so a strong initial response may be an important component of a good defense. You also may be able to assert your claim of a violation by making a counterclaim in the landowner’s suit. Land trusts should spend time when there is no lawsuit looming on the horizon to reflect on how to respond when one finally arises (not if). Managing a land trust is a risky business, and it is only a matter of time before you face litigation. Surviving a lawsuit is necessary to advance your mission, but thriv- ing in the face of a lawsuit is critical to sustaining the support of stakeholders who must have confidence in your ability to uphold conservation forever.

Steps in a Lawsuit

When it appears litigation is unavoidable (and this is a small percent of the time—less than 10 percent), it is important to understand the beginning steps that are typical of most lawsuits. The details of procedure vary from state to state, and different fact patterns and litigation styles may lead to different trial strategies. Still, most litigation follows the general procedural pattern summarized in this section, whether the suit has been initiated by a land trust seeking a remedy

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for a violation of a conservation easement or by a landowner or other party challenging the terms of an easement. The discussion that follows describes “civil” actions or lawsuits in which one party (the “plaintiff”) sues another (the “defendant”) under civil law to obtain either money damages for an injury or an order that the defendant do or stop doing a particular activity. While criminal law may apply to certain cases of trespass or wanton destruction, only a prosecutor can sue the defendant in a criminal case—and prosecutors often lack the time, resources or ability to pursue such cases. Above all, resolve to manage the process correctly. Do not allow political pressure to prevail over good sense and refrain from seeking revenge or assign- ing blame. Dedicate the time and money necessary to win in a manner consistent with the land trust mission and the conservation purposes of the protected property. There is no guarantee of success in any trial, but if the land trust is sued or if conservation values are threatened, the land trust must respond appropriately and vigorously. Although it is true that most lawsuits are settled before trial, land trust litigation may be about the principle of upholding the permanence of a conservation easement or protecting fee land, rather than about reducing costs of defense as in other civil litigation involving nonprofits. So even if it’s more cost-effective to settle a suit, if doing so threatens the viability of the easement, resist the urge to settle. Unless you can find a way to settle the matter and uphold conservation permanence through negotiation or mediation, you should be prepared for the long haul.

Commencement of the Suit and Land Trust Responses

A lawsuit formally begins when the plaintiff files a written complaint in court and “serves” it on the defendant. Most states require personal service upon the defendant or, in the case of a corporation, upon the defendant’s registered agent by a designated “process server”—usually the sheriff. In some cases, the plaintiff can mail the complaint with a waiver of service form attached. If the defendant signs and returns the waiver, the parties can skip personal service. This may save the parties time, money and the embarrassment of having an officer knock on their door. It does, however, require a bit of cooperation between

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the parties. If the defendant does not return the waiver, the plaintiff may still need to arrange personal service. Because service of process can be made in a variety of ways, be sure to contact an attorney as soon as you receive a copy of a complaint—even if you do not think you were properly served. Although parties may represent themselves, the land trust and the other party will ordinarily seek representation by attorneys when major interests are at stake. The attorneys will prepare and file documents and take other necessary procedural steps in the lawsuit. The complaint should name the defendant, list allegations of wrongdoing and request a remedy. A copy of the complaint is served on the defendant with a formal notice of the suit called a summons. The summons and complaint tell the defendant who is suing, in what court the lawsuit is to be heard, why the suit has been brought and when the defendant must respond to the complaint. These eight steps are typical when initiating or responding to a lawsuit. The order of the steps may vary slightly depending on the circumstances, but generally they occur as follows:

1. Note how and when you were served with a summons or other process beginning the suit. 2. Call your attorney immediately because many legal documents are time sensitive. For example, if your land trust has received a summons, it is important to seek legal assistance immediately to draft a response and file it on time. 3. Notify all insurers immediately. 4. Notify your board and craft a communications plan that outlines the respective roles and responsibilities. Call your board chair immediately and notify all members of the board of directors. The board should be informed of the lawsuit immediately and must approve major steps being taken. A lawsuit can affect a land trust’s reputation, fundraising and finances, so it is important for the board to receive regular updates on the status of the litigation. It’s critical that you craft a communications plan and determine roles and responsibilities early on in the process. First, establish one

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point person for the dispute. This point person may be responsible for interviewing attorneys, gathering documents and relaying land trust decisions to legal counsel. Second, designate one spokesperson authorized to communicate with the media. A spokesperson should be trained to interact appropriately with the media. An ideal media spokesperson is someone who is articulate with a friendly demeanor, is informed and can be easily reached. Third, designate one person to keep the board, staff and volunteers updated on the progress of the suit (usually the point person). The volunteers and staff don’t need to be overwhelmed with all the details, but they should be informed enough to assist in gathering documents and evidence and to be able to refer questions to the land trust’s designated spokesperson. Fourth, make sure everyone understands and keeps to his or her role. Clearly inform everyone that only the media spokesperson speaks with the media and the public, and only the point person speaks with the attorney, except when a point person or spokesperson has specifically requested another’s assistance. 5. Identify financial resources. Consider the financial resources available to help resolve the dispute. Having a legal defense reserve and legal counsel on staff or on standby are important precautions that will help to address these concerns. Review all the types of insurance available to help pay for some of the litigation. Otherwise, you will have to pay for an attorney, experts and other costs from your current operating funds. For more information see “Anticipating the Costs of Litigation” in Part I. 6. Preserve your records. Start a file on this case and designate a file manager. The file should include all documents related to the lawsuit, including materials from the opposing party, documents from your attorney and documents from your insurance company. Keep the file in a secure location, such as a locked cabinet, where only those who need access can review the materials. Do not alter or dispose of any documents, even if you think they may be harmful, because doing so may be illegal. Destruction of such documents can result in fines,

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Insurance

At the same time you are preparing the legal insurers and call all the relevant insurers as information for your attorney, you need to well. Your attorney should assist you with contact your insurance companies to ensure coordinating multiple insurers. that your land trust is financially protected to • Cooperate with the insurer and your attorney and the greatest extent possible. If you ask your submit all the requested documents, records and insurance company some basic questions and other information. Speed is essential, as is accu- follow a few guidelines, you can manage the racy. Be sure the originals are safely stored process efficiently. First, ask these three criti- and send copies of the records exactly as cal questions: they have been maintained. Do not alter or 1. Who hires defense counsel? destroy any record once a claim is threatened 2. What constitutes “reasonable and neces- or has commenced. sary” expenses? • Communicate with the insurer as the claim pro- 3. What attorney rate is the carrier obligated gresses. One of the usual conditions of an to pay? insurance policy is to obtain the insurer’s Next, make sure that you: consent before paying legal fees or agreeing • Give full information to your insurer immediately to a settlement. If there is a question or dispute upon learning of a lawsuit or a legal challenge. Send over reasonable and necessary legal fees, it is all the relevant paperwork, and call to notify better to address the matter up front, rather the insurer that you may have a claim and than after the fact. Be clear on what your have mailed the information. Review the options are so there are no surprises later. reporting requirements with the insurer and • If multiple insurance policies cover the dispute, your follow the instructions carefully. If you are attorney should make sure to coordinate all of the uncertain which policy may apply or whether insurers. Your attorney should insist on one multiple policies may apply, then—assuming counsel to represent all the insurers to avoid your lawyer and insurance agent agree as to confusion. Be sure to understand which which insurance policy applies (it could be insurer pays for what types of actions and both or all of the policies) and to what extent— damages (Is it just defense? Or does it send complete copies of the information to all include damages or counterclaims?).

imprisonment or loss of rights in the action. For more detail, see “Records: Maintenance and Storage” in Part I and consult chapter one of Managing Conservation Easements in Perpetuity. [http://learningcenter.lta.org/ltalrn/stewardship/managing_ces_in_perpetuity/] 7. Promptly and fully cooperate in obtaining all of the documents, records and other information requested by your attorney and insurer.

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8. Early on, develop an accurate statement of the full facts and chro- nology of the problem to share with your attorney and insurer. Refrain from exaggerating or hiding facts or interjecting emotional commentary.

Responding to the Complaint

After the plaintiff sends a summons and a copy of the complaint to the defendant, the defendant then must answer the complaint—usually within 21 days of receipt—or file a pretrial motion explaining why he or she should not have to answer the complaint. An answer is a formal legal document that is filed with the court. If the defendant ignores the complaint completely, the court will usually automatically default in favor of the plaintiff. Under this default judgment, a defendant loses the opportunity to present evidence or an argument. Appeals of default judgments are difficult, costly and usually unsuccessful. Therefore, if your land trust is sued, it is important to seek legal assistance from counsel as soon as possible to avoid costly or perhaps fatal errors.

Demurrers and Pretrial Motions While rules of procedure vary, in many jurisdictions the defendant may take certain procedural actions before even answering the allegations in the complaint. In some jurisdictions, the defendant can file a demurrer. A demurrer is a legal objection requesting the court to throw out the complaint because the complaint fails to sufficiently state a claim upon which legal relief can be granted. For example, some jurisdictions do not recognize a cause of action for intentional infliction of emotional distress as a result of a business transaction. If a plaintiff in that jurisdiction sues you for intentionally inflict- ing emotional distress upon him by refusing to sell your house to him, you may be able to file a demurrer and ask the court to throw the case out. Note that the defendant cannot contest any of the facts of the complaint in the demurrer—even if the facts are wrong. The demurrer simply argues that even if everything happened as the plaintiff contends, the plaintiff still does not have a valid cause of action.

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Besides filing a demurrer, a defendant can file a motion to dismiss for a variety of reasons. A motion is a request made to the court. Motions to dismiss are made by a party claiming that the complaint is insufficient. A motion to dismiss may claim the complaint was filed in the wrong court, that it was not delivered to the defendant or that the plaintiff is not entitled to sue because there is no legal remedy for the harm alleged. There are three common types of motions:

• Wrong court. There are three main reasons why a claim may be in the wrong court. 1. The subject of the dispute must be within the authority of the court, which is called subject-matter jurisdiction. For example, a family court cannot hear a bankruptcy case. 2. The court must have some relationship with the defendant and the activities that gave rise to the dispute, which is called personal jurisdiction. For example, a California court cannot force a defendant who resides in Florida to appear in California if the activity in question occurred in Florida and there is no other connection to California. 3. The geographic location (“venue”) of the court must be one allowed by the law of the state where the court sits. For example, often an action involving land must be brought in the county where the land is located. Also, the venue may not be inconvenient for the parties and witnesses: A Vermont court may be improper if all the witnesses reside in Texas. • N ondelivery. A defendant can also claim that there is no personal jurisdiction because the summons wasn’t delivered. If a defendant has not received a summons, he or she has not had notice of the suit and has had no opportunity to respond to allegations. For example, if the sheriff failed to serve a summons or the summons was sent to the defendant’s old address, the defendant would not have received notice.

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• N o legal remedy. A defendant can argue that there is no legal basis for the plaintiff’s claim. For example, the plaintiff does not have standing or the right to sue under the law.

Many pretrial motions deal with preliminary issues that may resolve the dispute without the cost and expense of trial. They may also be used as a litigation stall tactic, designed to eat up the opponent’s time and money. Discuss the use of motions with your attorney.

Answer In the answer, the defendant usually denies all, or part, of the plaintiff’s allegations. For example, in a complaint, a land trust could claim that:

1. The landowner lives at 25 Old Mill Road. 2. The property is subject to a conservation easement. 3. The easement prohibits development other than simple repairs to an existing house. 4. The landowner built a large addition to the house in violation of the easement because it extends the house into a “no-build zone.”

In response, the defendant will need to answer “yes,” “no” or “I don’t know” to each allegation. For example, the landowner could answer:

1. Yes, I live at 25 Old Mill Road. 2. Yes, the property is subject to a conservation easement. 3. Yes, the easement does restrict development to the “no-build zone.” 4. Yes, I built an addition, but it does not violate the conservation easement because the addition is not in the “no-build zone.” The boundary line is inaccurate.

If you are the defendant, be sure your answer addresses each allegation specifically and is free from extraneous language. In the complaint, the plaintiff’s lawyer usually makes as many allegations as possible. Some allegations may appear outlandish and some may even seem

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unrelated to the facts of the dispute. If your land trust is the plaintiff, avoid fanciful allegations and stick to clear claims in the complaint, so that you appear forthright and focused on relevant factual issues.

Defenses Affirmative Defense A negative defense is simply a denial of the plaintiff’s allegations. In addition to affirming or denying each allegation, the defendant can assert an affirmative defense in the answer. An affirmative defense is basically anything beyond “No, I didn’t do it.” An affirmative defense is a justification or excuse that would prevent the defendant from being liable even if all of the allegations are true—“Yes, I did it, but. . . .” An affirmative defense might be that the plaintiff cannot sue because the time allowed by the state’s statute of limitations has expired. Or the landowner could argue that the land trust gave him permission to build the addition in the “no-build zone.” If the court accepts this argument (based on some evidence), the landowner would not be liable. Other affirmative defenses include waiver, laches, release and estoppel. In some cases, if the affirmative defense is not made in the initial answer, the defendant is deemed to have waived it. Thus, it is important make sure your attorney knows the facts of the case and has researched the appropriate statute of limitations before filing an answer.

Counterclaim In the answer, the defendant can also file a counterclaim against the plaintiff. A counterclaim is similar to the complaint in that it lists allegations of wrongdoing. The plaintiff then needs to respond with an answer to the defendant’s allegations. A counterclaim does not have to be related to the original complaint.

Cross-claim Multiple plaintiffs and defendants in the same case are called co-defendants and co-plaintiffs. When a claim is asserted between co-plaintiffs or co-defendants, it must be related to the original claim in the case and is called a cross-claim. For

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example, a land trust could sue a landowner for permitting a logging company to cut down protected trees and, at the same time, could sue the logging company that cut down the trees. In his answer, the landowner could make a cross-claim against the logging company for deceiving the landowner into giving permission. Since these claims are all related, it would be efficient to hear them all at once. Courts will generally allow cross-claims unless they feel the matter is unrelated.

Establishing Goals

Once you take the initial steps, it’s time to think about the results you want. Always seek a sound conservation result—and never proceed with the intent or plan to get revenge or to punish. In addition to upholding the purpose of its easements and protecting its fee land, priorities for your land trust will likely include maintaining good relationships within the community, as well as keeping costs proportional to the overall goal. After discussing the overall priorities of your land trust with your board, staff and attorney, you will need to decide the remedy that you seek, as well as the best approach to resolve the dispute— whether it is voluntary dispute resolution or litigation. Remember to read and reread the conservation easement (or the deed to the fee land) as those documents may dictate certain preliminary actions.

Remedies You will need to decide with your attorney the remedy, or what your land trust hopes to gain by resolving the conflict. Remember, your response should be proportional to the severity of the damage, both on the ground and, if a conservation easement, to its purposes. Remedies can be monetary or nonmonetary or may involve a combination. Three common types of remedy are money damages, specific performance and injunction.

Money Damages There are times when the most appropriate remedy is money. Money damages might be appropriate, for example, when a person causes property damage to a land trust holding that can be restored by spending money to remediate

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the damage. Judges prefer awarding money damages over awarding “specific performance” by the defendant because a monetary remedy is quantitative, relatively simple and usually requires no follow-up work for the court. There are three types of money damages:

• C ompensatory damages. The purpose of compensatory damages is to put the prevailing party in the financial position that he or she would have been in had no breach or injury occurred. Compensa- tory damages are damages that can be specifically calculated, such as repair or replacement costs. For example, if trees were cut in violation of the easement, a land trust can ask for the market value of the trees, the cost of replanting the area and any administrative or other costs incurred by the land trust in responding to the violation, and potentially any value an expert can attribute to conservation benefits. • C onsequential damages. Consequential damages are losses that are indirectly caused by the breach or injury. Consequential damages are sometimes awarded in addition to compensatory damages if, at the time the contract was signed or the injury occurred, consequential harm was reasonably foreseeable. In the above example, if the removal of the trees caused major sediment to collect in a productive salmon stream, the cost of restoration of the stream could be added to the settlement. • L iquidated damages. In some contracts, the parties agree to a set dollar amount in the event of a future breach in order to avoid costly dispute damages. Liquidated damages are generally valid only if it would be difficult to determine actual damages at the time the parties entered into the contract and the amount of the liquidated damages is reasonable. For example, in 2008, a seller and a limited liability company (LLC) entered into a purchase and sale agreement for a building in Manhattan. The building was encumbered by a historic preservation façade easement, and this easement was identified as a permitted exception in the agreement. Nevertheless,

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the LLC attempted to back out of the sale the day before closing, claiming that the façade easement rendered title unmarketable. In particular, the LLC pointed to a separate provision of the purchase and sale agreement that stated, “Seller has not sold, or contracted to sell, transferred or encumbered, leased or assigned any air rights or developmental rights relating to the premises.” The seller brought a breach of action claim and sought to retain the $225,000 deposit as liquidated damages.34 The court held that the purchase and sale agreement’s specific mention of the easement as a permitted exception trumped the more general language invoked by the LLC and thus awarded liquidated damages to the seller.

Specific Performance Specific performance is a nonmonetary remedy that requires the defendant to perform an action that the court determines the defendant was obligated to do under the terms of a contract (or under a deed restriction or covenant or under a conservation easement). Specific performance is available only when the prevailing party cannot be adequately compensated by money. Specific performance is often available in contractual disputes over land because no two pieces of property are exactly the same. For example, in a purchase dispute, the seller of land may be ordered to convey the land to a buyer, because no other piece of land will be exactly the same as the land the buyer contracted to buy.

Injunction If a problem is ongoing or expected, the court may impose another nonmonetary remedy that prohibits a defendant from continuing certain acts that would cause harm or requires the defendant to perform an action other than that which is spelled out in a contract. In either case, the remedy is available only if money damages would be inadequate. For example, if a landowner is logging where the conservation easement specifically forbids it, an injunction would

34. Merims v. 294 West 10 Realty, LLC, 2011 N.Y. slip op. 31658U; 2011 N.Y. Misc. LEXIS 2952 (Sup. Ct. N.Y. June 15, 2011). [http://www.courts.state.ny.us/Reporter/pdfs/2011/2011_31658.pdf]

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require the landowner to stop the logging immediately to prevent irreversible damage. Or a landowner might be ordered to clean up a toxic spill that would irreparably harm a body of water.

Determining the Facts

At this point in the process, the land trust, with the help of an attorney, already will have decided the results it wants to achieve. The second part of the legal strategy is to identify the facts that will shape the case. The land trust must have factual evidence to support its lawsuit or to support its defense when being sued. Winning a case depends a great deal on the facts gathered; therefore, this step is extremely important. Facts typically include the time and place of the incident, witnesses and actual evidence, such as photos, maps, video or other documentary evidence. Facts can be gathered both informally and formally, the latter with very specific rules and procedures governing their collection and use in court.

Informal Fact Gathering One of the first ways to identify facts is to sketch out a time line that includes key dates, such as when the relationship between the parties started, when the contract was formed or when the conservation easement was signed, and when a violation occurred or other legal challenge commenced. As part of this process, you can identify key people, including witnesses. It is also important to identify key events that did not happen, such as procedures that were not followed. In addition to thinking about the key facts, consider how the facts can be shown to a judge or jury, and what facts are likely to make an emotional impact on the jury or be critical to a judge. Facts can be presented to a judge or jury using:

• E xhibits. Exhibits can include photographs or video of the scene taken from different perspectives and all records and documentation related to the dispute. Physical evidence—such as fallen trees or stumps, excavations, stream alteration or any other changes to the land—should be preserved in its original condition until your

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lawyer can advise you, unless immediate action is necessary to mitigate the damage or to control a hazardous situation. Likewise, other exhibits, such as important documents, should be given to your attorney for safekeeping. • Witnesses. Virtually every case has critical witnesses. It is important to identify whether there are eyewitnesses, such as volunteers working on conservation land or a clerk who witnessed the signing of a contract. Be aware, if a witness is represented by an attorney, that the witness cannot be interviewed by your lawyer, even if the lawsuit has not yet been filed, without also including the witness’s attorney. • E xperts. Depending on the technical nature of your dispute, it may be beneficial to have an expert either as a consultant or as an expert witness. Your attorney will define the role of any expert witnesses, but your land trust may be helpful by identifying qualified experts.

Formal Fact Gathering Many of the facts discussed so far can be discovered informally before litigation commences. Once a lawsuit starts, however, court procedural rules enable you to obtain needed information from the opposing party and others through a formal process called discovery. Discovery is typically the most expensive part of litigation, but it is also the point in the proceedings when each party can determine whether the opposing party’s assumptions can be proven. Discovery occurs before trial and outside the court room. The discovery procedures used to obtain evidence include:

• D epositions: the oral questioning of experts and other witnesses under oath • Interrogatories: a formal set of written questions provided by one party to the other, required to be answered in writing and under oath • R equests for production and entry on land: a request for documents from the opposing party or a request to enter land controlled by that party

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• R equests for admission: a request for the opposing party to specifically admit or deny the truth of specific factual statements

Your lawyer will navigate the many rules related to the acquisition of evidence through discovery and its presentation at trial. Some of the key discovery rules relate to relevance, privileged information, disclosures and protective orders. First, the information requested must be relevant to the subject matter involved in the action. For example, during a dispute over an easement violation that does not involve a claim for damages against your land trust, a request for a list of all the names of your donors and how much they donated is likely not relevant to the subject of the action. In such a situation, your attorney will argue that such information is irrelevant and, if successful, put a stop to the opposing party’s fishing expedition to uncover damaging information. Even if information is relevant, however, it may be privileged. Information is privileged, for example, when legal rules provide that a communication between an individual and someone with a specific type of relationship is confidential. If information is privileged, then the opposing party is not allowed access to it or to present it at trial unless they can obtain the information from unprivileged sources. There are also disclosure rules that require each side to give the opposing party names of the witnesses and copies of documents they will use at trial. To prevent discovery procedures from being used to harass and impose costs on an imposing party, courts have the power to issue protective orders limiting the amount and type of discovery a party may use. Not all information that may be obtained through discovery will be admitted into evidence for presentation to the jury or judge at trial. State rules of evidence generally provide that, to be admitted, evidence must not be privileged matter and must be relevant in the sense that it must tend to prove or disprove a fact that is in controversy. Sometimes, even relevant evidence is disallowed if it is confusing, prejudicial or duplicative of other evidence. Another key evidence rule relates to the admission of statements made out of court. With certain important exceptions, [http://www.law.cornell.edu/rules/fre/rule_803] out-of- court statements are called hearsay and are not admissible in court to prove the truth of the matter stated because they are not subject to cross-examination

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and, therefore, are considered unreliable. The hearsay rule prevents the court from listening to testimony of a witness who does not know the information personally but is only repeating information he or she heard from someone else. The discovery process will help you and your attorney evaluate whether the facts of your case are strong, or whether a change in strategy is necessary. Addi- tionally, discovery is a primary reason why thorough recordkeeping is essential. See chapter one of Managing Conservation Easements in Perpetuity [http:// learningcenter.lta.org/ltalrn/stewardship/managing_ces_in_perpetuity/] for more information on recordkeeping related to discovery.

Identifying the Law

While you are gathering the facts of the case, you should commence on a critical part of your legal strategy: identifying the law that will shape your case. The law determines when a lawsuit can be brought, where the lawsuit can be brought, who can bring a lawsuit and, if the case goes to court, how attorneys and clients advocate. While the land trust will rely primarily on legal counsel for the legal strategy, the land trust still has a role in setting the tone for the attorney. At this stage, your land trust may decide to attempt a voluntary resolution again if your investigation of the facts and the law has changed your evaluation of the case, or the attitude of the other side. The court might also order mediation.

When? Your land trust will have a certain amount of time to bring a lawsuit after the injury or violation occurs. The amount of time within which a suit can be filed, called a statute of limitations, is determined by state and federal laws. This time- frame varies by state and the type of claim. For example, for a personal injury case, a state might require the complaint to be filed within two years of the injury. In a contract case, a state might require the complaint to be filed within six years after the breach of contract.

Where? The court where a case will be heard must have the correct jurisdiction and the proper venue. Jurisdiction deals with the power of the court to hear a case, while

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venue deals with the requirement that a case be brought to the proper court. The determination of jurisdiction and venue is based on the subject matter of the case, whether the circumstances mean that a court can fairly require a defendant to appear and whether a particular court location is convenient for the parties and witnesses. In many states, an action involving land must be brought in the county where the land is located.

State Courts Most land trust litigation will be brought in a state court. State court systems usually have three levels. The first level is the local county or municipal trial court. Generally, this is the first place you would go for a trial to litigate your dispute. The second level in most states is the intermediate appellate courts. These courts review all decisions appealed from lower courts. Finally, the state supreme court hears appeals from the intermediate appellate courts. The majority of states divide trial court cases based on the subject matter and the amount of money involved. General trial courts typically hear these types of cases:

• Breach of contract • Foreclosure of mortgages • Personal injury • Wrongful death • Land disputes

Some matters involving land are decided initially in state or local administrative bodies. For example, most local municipalities have decision-making bodies such as planning commissions and zoning boards. For issues related to local zoning or land subdivision in these localities, the land trust would first go to the local boards. Board decisions are usually appealable to the state courts. Some states also have statewide land use or environmental boards and special appeals courts, such as a state environmental court that will hear land use or environmental cases. Similarly, if a land trust has an issue related to power lines or pipelines or to cable, telecommunications broadcasting or

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electricity transmission, the issue may be brought in front of the state’s public service board or other body charged with regulating utilities.

Federal Courts Land trust litigation may occasionally take place in a federal court. Just as in the state court system, federal courts have several levels. The first level is the United States District Court, which is the equivalent of the state trial courts. There are 94 federal district courts in the United States and its territories, with at least one court in each state. The next level is the intermediate appellate court. Thirteen regional courts of appeals review appeals from federal district court decisions. Finally, the United States Supreme Court hears appeals from the federal courts of appeals and may hear appeals from state courts involving questions of federal law. To file a case in federal court, you must meet at least one of two important subject-matter jurisdiction criteria. Either the case must deal with a federal question—an issue arising under the U.S. Constitution, laws and treaties—or the parties must be of diverse citizenship. Federal questions include constitutional challenges, cases involving the application of federal statutes or challenges to actions taken by a federal agency. Diversity of citizenship exists when the parties are from different states or countries and the amount in controversy exceeds $75,000. The action must also satisfy the criteria of federal statutes regulating the venue of the district courts. For example, if a trespasser from another state entered conserved land and cut down trees and if the value of trees or damaged property exceeded $75,000, the land trust may have the option to bring the claim in federal court.

Example: In a two-to-one split decision with a written dissent, the U.S. Court of Appeals in Kentucky upheld the lower court’s award of $77,337.50 in attorney’s fees and $22,000 in expenses and grant of summary judgment enforcing a conservation easement held by The Nature Conservancy (TNC).35 The easement protects a

35. The Nature Conservancy v. Sims, __ F.3d __, 2012 WL 1813675. [http://www.ca6.uscourts.gov/opin ions.pdf/12a0143p-06.pdf]

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world famous and delicate Kentucky karst and cave system and prohibits the landowners from altering natural sinkholes on their property. If not maintained in their natural state, changes in the sinkholes could adversely affect the underground aquifer and nearby water bodies needed to support the significant karst/cave system and the natural features of the property. The court agreed that the landowner’s willful filling of a sinkhole violated the “unambiguous” conservation easement despite reserved residential and agricultural rights. This case was removed to the federal court system instead of being tried in Kentucky because the easement holder, The Nature Conservancy, is a corporation organized under the laws of the Commonwealth of Virginia, not Kentucky. When the TNC attorneys were looking at their strategy, they chose to move the case to the federal system using their corporate status because they thought they would get a better decision in a federal court.

The type of the issue and the geographic location will most likely determine which court hears the case. The local nature of most land trust litigation involving easement violations means that most cases will be brought in state court. On the other hand, cases involving federal tax liability will be brought in federal court, either in the U.S. Tax Court or in the U.S. District Court. However, while this is the general framework, your jurisdiction may be different. Consult with an attorney before filing a claim in any court. See the National Center for State Courts website [http://www.ncsc.org] for more information on state court rules. The court does not allow just anyone to sue in court. The plaintiff must have standing, which is the right of a party to make a legal claim based on his or her injury. The land trust will need to demonstrate its connection to the harm in order to justify its participation in the case. For instance, if the land trust holds a conservation easement where a trespasser cuts trees, then the land trust can show that it has suffered an injury because the easement has been violated. If a land trust is a party to a contract concerning the property,

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it likely has standing. If your state considers conservation easements to be a property right, and most do, then your land trust likely has standing. Consult with an attorney to determine if you have standing. If a plaintiff does not have standing, he or she may still be able to sue as a third party. In easement cases, third-party standing refers to the right of someone who is not a party to the conservation easement to assert a claim to protect his or her rights or the rights of others. For instance, if a landowner violates his or her easement, applicable law may allow a neighbor to show sufficient injury to seek enforcement of the easement if the neighbor feels the land trust is not enforcing the easement. Most recent cases have not found a private third-party right to enforce private conservation easements (some exceptions exist in Massachusetts under a particular regulatory scheme regarding public conservation). A party named in a conservation easement, as well as its legal successor, usually has standing as does the state Attorney General. This area of law is still developing. For the list of current standing cases, see the third-party enforcement collection in the Conservation Defense Clearinghouse. [http://tlc.lta.org/clearinghouse/collections/3] Without standing, a land trust may also be able to participate in a lawsuit as an amicus curiae (“friend of the court”). An amicus curiae is someone who is not a party to a case but who volunteers to offer information on a point of law or some other aspect of the case to assist the court. The court must authorize the amicus curiae to proceed. Participation occurs either by the land trust taking the initiative to offer to participate or, more typically, by the lead in the case seeking participation of other groups that are friendly or who have a stake in the disputed issue. The state may have standing to sue if it asserts the public trust doctrine or the charitable trust doctrine. The public trust is a legal doctrine referring to the obligation to benefit the general public over the interests of a private individual or entity. The state has a duty to protect certain types of property on behalf of the public. For example, public beaches may be held in trust by a state for the good of the general public. The state, rather than an individual, may have standing to assert a violation of the public trust. In contrast, a charitable trust is typically created by a private individual. The individual holds property in

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trust for the general public’s benefit. Charitable trusts can be enforced by the Attorney General on behalf of the public. In some states, the Attorney General views conservation easements held by land trusts as charitable trusts, but this opinion has not been confirmed by any court in any state. Attorneys General usually have the right to oversee all charities, including land trusts, and may choose to enforce an easement on that basis. Sometimes a statute will specifically state who has the right to bring a judicial action. The Uniform Conservation Easement Act (UCEA), adopted in many states, recognizes four categories of persons eligible to bring judicial actions in order to enforce, modify, terminate or otherwise affect conservation easements. The four types of people are:

1. An owner with an easement on his or her property 2. A holder of the easement, usually a land trust 3. A person with a third-party right of enforcement 4. Any other person authorized by law

Read the conservation easement enabling law for your state to understand whether and how your state addresses standing and other issues. For a guide to all 50 states’ enabling acts, see “Conservation Easement Enabling Statutes.” [www.landtrustalliance.org/policy/conservation-easement-enabling-statutes]

Choosing the Best Approach

After discussing the mission, goals and priorities of your land trust, the facts of the case and the applicable law, you and your attorney should discuss the best approach to resolving the dispute—whether it means dispute resolution or going to court or something in between. There are many ways that a land trust can resolve a conflict without resorting to litigation. The key is not to rush to litigation but also not to avoid it if that is your best strategy. There are two major types of dispute resolution: alternative and voluntary. Alternative dispute resolution (ADR) is broadly defined as the process for disagreeing parties to obtain third-party help in reaching an agreement without litigation. Mediation and the more formal arbitration and government

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enforcement are examples of alternative dispute resolution. Voluntary dispute resolution differs from ADR in that the parties to a dispute work together to sort out their disagreement, rather than ask a third party to decide the winner and the loser. Education and negotiation are the two major types of voluntary dispute resolution techniques. Unlike matters brought to a court for decision or to an arbitrator or mediator, parties involved in voluntary processes maintain control of the results. Voluntary dispute resolution can help maintain friendly relationships with landowners and avoid costly alternative dispute resolution or litigation. Staying out of court not only saves money but it can also bolster your land trust’s reputation with the public as being cooperative and not quick to litigate. People will be more comfortable donating easements or land if they feel confident that your land trust will work with them and be reasonable if disputes arise, and at the same time uphold the overall intent of the conservation easement or protect the conservation values of fee-owned land. Land trust personnel must demonstrate skill in dealing reasonably with people while firmly upholding the purposes of the conservation easement. Knowing when and how to be appropriately flexible and when to stand firm requires making judgment calls while recognizing the associated legal, financial and regulatory risks, as well as any risks to the organization’s reputation. Remember that the conservation easement or a deed covenant conveying fee land may dictate mediation or arbitration as a first step, so be sure to read all the documents and have your attorney read them carefully, too.

Voluntary Dispute Resolution Education Many people may not consider education a key part of dispute resolution. However, education is often the first (and usually the most effective and -effi cient) step in resolving a conflict. When your land trust shares information, it can identify common goals and potential areas of dispute with landowners and the community. For example, landowners may not be familiar with the restrictions in an easement or understand the impact of their actions. For all technical lapses and minor violations, your land trust may want to pursue landowner education and relationship building as the first and possibly only resolution

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tool. For example, land trusts can remind new landowners to give the land trust a call before changing the use of the land, which may also remind them to send a notification before selling their property. To demonstrate for future auditors or monitors that the land trust addressed the issue appropriately, be sure to document for the permanent file the education steps taken by the land trust, as well as the landowner’s response, and any conditions required of the landowner.

Negotiation Negotiation is a strategic process that requires excellent communication skills. Effective negotiators realize that the process is continuous and changing—a journey and not a destination. The best negotiators know that everyone in a negotiation will learn something in the process that can assist both the short- term resolution and the long-term prevention of repetitive violations. In general, negotiations do not legally bind the parties, but parties may enter legally binding written agreements based on negotiations that divide limited resources or memorialize a mutually beneficial agreement. Negotiation can occur in many contexts. The involved parties might sit down for a formal negotiation with set rules and procedures or choose to negotiate in less formal settings or in personal meetings. Remember that negotiation is an ongoing process. You should consider all communications—e-mail, phone calls, site visits—with the other party or parties to a dispute as opportunities for seeking common ground and furthering land trust interests. Be sure to document all discussions for the file. Disputants with an ongoing relationship should always consider negotiation before litigation because they will have to deal with each other in the future. Negotiation, properly managed, can lead to a stronger relationship and improved goodwill, which, in turn, creates a foundation on which to prevent future challenges. Litigation seldom, if ever, fosters stronger relationships. Your land trust should consider negotiation at all phases of a dispute. You can use negotiation when you are drafting the conservation easement to prevent disputes. Before or at the beginning of a lawsuit, you may be able to use negotiation to reach an agreement that will avoid litigation. Even in the middle of

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a trial, it is possible to negotiate for a better result. Negotiation can happen at any point up until the court’s final judgment—or even after judgment if there are questions about enforcing the court’s decision.

Example: In 1969, the then owner of a parcel of land conveyed a conservation easement to the Chatham Conservation Foundation in Massa- chusetts, protecting an expanse of salt marsh, coastal dune and beach. The easement prohibited “buildings and other structures” but reserved the right of the landowners to “pass and repass over the premises.” At the time of the easement grant, the property had an existing wooden plank walkway over the dunes and across a marshy area. In 1997, the landowner requested the Foundation’s approval to build an elevated walkway to replace the wooden plank walkway. The Foundation refused, citing the prohibition against structures, and brought suit for a declaratory judgment that the elevated walkway was a violation of the easement.36 At trial, the landowner claimed that the elevated walkway would provide safer passage and would be more environmentally beneficial to the marshland than the plank walkway. The Foundation contended that the elevated walkway would harm the property’s scenic character. The trial court held for the land trust, finding that the landowner had not explicitly reserved the right to improve the existing walkway. The court remanded the case to the trial court to determine whether an elevated walkway was proper based on safety and environmental considerations. On remand, the trial court concluded that the landowner did not need to explicitly reserve the right to improve the walkway and that the blanket prohibition of “structures” was not necessarily sufficient. This case points to the importance of the easement’s purpose clause, for part of the court’s reasoning was that the elevated walkway was less damaging to the marsh,

36. Chatham Conservation Foundation v. Farber, 56 Mass. App. Ct. 584; 779 N.E.2d 134 (Mass. App. Ct. 2002). [http://tlc.lta.org/clearinghouse/documents/241]

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even though less aesthetically pleasing. The emphasis on habitat protection over scenic protection was tied to the easement’s stated purposes of “preserving the premises as nearly as may be in the natural state in which they now are.” At the same time, the easement did not mention scenic protection as a purpose. Argu- ably, the land trust might have been able to avoid this outcome by negotiating the terms of the reserved right more fully at the outset. Even after, the parties might have been able to negotiate a structure that would have been acceptable to all parties and more in harmony with the purposes of the conservation easement, rather than engaging in protracted litigation.

Start preparing for negotiations by identifying your interests and conveying them to the other parties. Be sure to consult with a skilled attorney about the legal issues presented by the situation so that you can rely on laws and prior judicial decisions that support your interests. Airing your interests gives you the benefit of clearly articulating the circumstances that led to the dispute. The other parties may not fully appreciate your concerns until you articulate them. Brainstorm with the other parties to create a list of possible resolutions to the problem. Evaluate the options together, and consider how each option will affect the parties and the situation. Understand that the solution you envision may not be the only workable solution. Communicating your interests instead of your demands creates a foundation that allows both parties to identify mutually beneficial or acceptable solutions as opposed to one party listing “winners” and “losers.” This process is sometimes referred to as integrative bargaining. Good communication is the key to relationship-focused negotiation. Think carefully about the tone you want to set for the negotiation and how to maintain that tone. Focus on the issue and not the emotions—yours and theirs. Carefully select the language you use to avoid escalating the dispute. Use a positive tone to keep yourself and other parties from taking a defensive stance. Be assertive, but not aggressive, and confidently express your interests without damaging your relationship with the other parties. Even if your interests are at the core of what is most important to you personally, do your best to remain

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calm when you communicate them. You can make it clear, without relying on emotion or strong language, that a particular matter is important to the land trust. See pages 67–69 of Conservation Easement Stewardship [http://learning center.lta.org/ltalrn/stewardship/ce_stewardship_/] for specific suggestions on language choices. Likewise, make your best effort to remain rational in the face of strong feelings expressed toward you. Respond by first acknowledging the other party’s feelings, and try to focus on having a learning-focused dialogue rather than a debate to prove the other party wrong. Explain how the party’s position affects your interests. Try to focus on the problem instead of on feelings, while still acknowledging that feelings exist. Remember that you can acknowledge that someone is upset or angry without making the discussion personal. Whenever possible, look for ways to improve your relationship with the other party without handicapping your land trust’s position in the process. The best way to do this is by focusing on issues that you can most easily agree on and build from there. Communicate in a way that promotes listening. Give the speaker your undivided attention by looking at him or her directly. Observe body language. While the speaker is talking, you should be focused on listening rather than preparing your response or conducting a side conversation. Do your best to eliminate or ignore distractions. When you speak, use a calm tone of voice. Be open and honest. Reflect what has been said by paraphrasing. “What I’m hearing is . . .” and “Sounds like you are saying . . .” are great ways to reflect back. Ask questions to clarify certain points: “What do you mean when you say . . . ?” “Is this what you mean?” Use your own body language and gestures to convey your attention. For example, nod occasionally, smile and use other facial expressions. Note your posture and make sure it is open and inviting, without arms crossed in a hostile position. Encourage the speaker to continue by expressing small verbal comments like: “Yes,” “I see,” “Interesting,” “Uh huh.” This does not necessarily mean that you agree with the speaker, but just that you are listening. Avoid interrupting and, when it is your turn, state your opinions respectfully. Make sure land trust board, key volunteers and employees are familiar with negotiation and bargaining techniques. Read Getting to Yes: Negotiating Agree-

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ment without Giving In, by Roger Fisher, William L. Ury and Bruce Patton, and see chapter four of Acquiring Land and Conservation Easements [http://learn ingcenter.lta.org/ltalrn/land_protection/acquiring_land_and_ces/] for further instruction.

Third-Party Assisted Informal Dispute Resolution Mediation Mediation is a type of negotiation facilitated by a third-party mediator. The mediator does not advocate for a particular side or cause; instead, the mediator is a completely neutral party, ideally one having general knowledge of the issues and substance of the matter in dispute. A mediator listens to the parties’ issues and helps generate options when the parties are no longer making progress toward an agreement. When friction stops a negotiation, the mediator tries to “grease the wheels” by applying knowledge of the subject matter at issue and facilitating cooperative behaviors. Mediation will likely be successful in situations where the parties share interests in similar results but have personal differences that halt negotiations. Here, a skilled mediator can steer the parties to common ground. The mediator does not make decisions for the parties; the mediator uses training, skills and knowledge to foster agreement between the parties. A simple Internet or Yellow Pages search will uncover many mediation service providers in diverse specialty areas. You can also ask other land trusts or courts, or your attorney, for referrals. The Attorney Locator on The Learn- ing Center also lists mediators by state. Once you have narrowed your list, interview potential mediators to find one with an appropriate background and knowledge base. Then contact several of the mediator’s previous clients to learn about their experiences with the prospective mediator. The cost of retaining a mediator may be borne by one party or shared by the parties to the dispute. In some states, mediation may be part of the litigation process. In so-called court-connected ADR, mediation may be required by statute or court ruling after a suit has been filed but before it can proceed through discovery and trial. In other states, the judge may have the authority to encourage or require mediation or another form of ADR at various stages in the proceeding.

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If your mediation is successful, create an agreement that is signed by all parties to hold everyone accountable to the terms.

More Formal Third-Party Dispute Resolution Arbitration Arbitration is a legally binding “mini-trial,” which is generally not appealable. That is, arbitration generally follows procedures that resemble a trial. Arbitra- tion transfers control of the solution from the parties to either a “judge”—who is a hired arbitrator—or a panel of arbitrators. Arbitration can be as expensive, technical and time-consuming as litigation, so use it cautiously if at all. Avoid requiring arbitration in any conservation easement or other agreement.

Enforcement by a Government Agency While not strictly a judicial remedy or alternative dispute resolution method, enforcement by a government agency may be effective. If you believe that the landowner violated a law that a government agency is responsible for enforcing, such as pollution-control legislation or zoning laws, and, if the landowner refuses to cooperate, your land trust could file a complaint with the government agency to undertake enforcement. You may have to push to get attention. You’ll have to make the case for why the matter merits the agency’s time as compared to everything else on its agenda. Often you will find that you need two or more of the available tools to resolve a violation or lawsuit. Education, negotiation and mediation are the most commonly used tools. If used effectively and in combination, these tools will likely resolve most violations.

Litigation

If one or both parties do not recognize each other’s rights, or if you and the landowner, in a prior attempt at resolving the dispute voluntarily, reached a stalemate, then going to court is the next step. A stalemate may occur when parties are unwilling to hear other points of view, are determined to have a particular result or are just plain angry. If only one party pays for a mediator, for example, it either could indicate that the other party is not truly willing to

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Civil versus Criminal Law

Civil law addresses matters between private ing criminal proceedings to prosecute people individuals and businesses or other organi- accused of crimes that harm other people or zations, such as disputes about contracts, property. property transfers, inheritance, business The same conduct can be both a civil wrong formation and liability for injury to people and and a crime. For example, a person who inten- property. Legal challenges for land trusts are tionally dumps toxic waste onto conservation covered primarily under civil law where a land land may be criminally liable and face impris- trust seeks a remedy from a landowner or vice onment by the government for breaking envi- versa. ronmental laws. At the same time, he or she Criminal law involves the protection of soci- may be civilly liable and may have to pay the ety. The government is responsible for bring- landowner for the damage caused.

negotiate or could risk degrading the parties’ sense of the mediator’s neutrality, making litigation necessary.

Next Steps in the Litigation Process Judge or Jury Trial? The jury is central to the American litigation process, but juries do not decide all cases. The right to a jury trial is preserved in civil cases, but your land trust’s case will not automatically be heard by a jury. You may prefer a jury trial if you think the people of the jury will be more sympathetic to your case. However, a jury trial can be time-consuming. In most states, if neither party requests a jury trial, the case will be heard by a judge at what is called a bench trial. In a bench trial, a judge may allow relaxed courtroom procedures and may be able to make decisions more quickly. A bench trial is often preferable if a case is complex and based on technical questions that the average layperson may find confusing. Your land trust attorney should decide whether to request a trial by jury.

Trial Date The trial date is set by the court after the parties have submitted appropriate documents and discovery is complete. Often, the defendants ask to postpone the

109 Managing a legal challenge Steps in a Lawsuit

trial. Your attorney should advise you whether to agree to such delays. In some places, it is considered improper to object to delays—even multiple ones. Delays may vary by judge or be affected by other matters on the court’s schedule.

Pretrial Conference Once a trial date is set, a pretrial conference is scheduled. A pretrial conference is a meeting between the judge and the attorneys to allow the parties to discuss issues such as whether discovery has been completed, the results of any mediation undertaken, what issues in the pleadings are actually to be tried, what witnesses and exhibits may be used at trial and the expected length of the trial. The pretrial conference minimizes delays in trial proceedings and may facilitate a settlement.

Trial First, each party gives an opening statement. The plaintiff presents evidence first. The plaintiff usually has the burden of proof—the responsibility to present enough evidence for the court to resolve the lawsuit in the plaintiff’s favor. The defendant presents evidence next. Finally, each side presents a closing argument. The case may be heard before a judge or a jury. If it is a jury trial, the judge gives the jury instructions on the applicable law and how to apply it. After deliberating, the jury presents its verdict to the judge, who gives judgment based on the verdict. If the case is heard only by a judge, the judge will make findings of fact and conclusions of law and give judgment based on them.

Posttrial Briefs and Motions Once the judge or jury decides the case, either party may file a posttrial motion. Posttrial motions are filed with the court that just heard the case. The basic types of posttrial motions include a motion for new trial and a motion for judgment as a matter of law, sometimes called a motion for judgment notwithstanding the verdict. A motion for a new trial may be granted if the judge decides that the jury’s verdict was contrary to what the evidence showed or if new evidence not available during trial is subsequently discovered. A judge may grant a motion for judgment as a matter of law if there is no way that a reasonable jury could

110 Managing a legal challenge After the Settlement or Trial

have decided the case the way it did based on the facts. A judge may also over- turn a judgment if the judge discovers that the court lacked jurisdiction over the subject matter or for reasons indicating basic unfairness, such as an excus- able mistake or fraud by one of the parties.

Appeal The losing side may file an appeal—within the time period allowed—to an appropriate appellate court. An appeal may be based on either a mistake by the trial judge in stating the applicable law or a procedural error. An appeal is not the same as a new trial. The facts of the case ordinarily cannot be reheard by the appellate court, which generally means a case on appeal will not involve new evidence. In some instances, both sides are unhappy with the trial court’s judgment, which may result in appeals by both parties.

After the Settlement or Trial

Regardless of the result, it is important to learn from the experience. Your land trust should assess its actions and determine what can be done differently. Perhaps training, better monitoring or earlier communication with neighbors or the landowner could have prevented disputes from happening in the first place. Review the effectiveness of your safeguards and procedures. Those persons involved in the litigation should submit a report to the board summarizing what they have learned. Your land trust may also have your spokesperson issue a press release. See chapter three of Managing Conservation Easements in Perpetuity [http://learningcenter.lta.org/ltalrn/stewardship/managing_ces_in_perpe tuity/] for suggestions on a media plan. You may also have further follow-up with the parties to the litigation, such as collecting any damages or awards. This process may necessitate further litigation. Your attorney should advise your land trust board about all necessary steps to fully complete all aspects of litigation. Again, let the Land Trust Alliance ([email protected]) know about your lawsuit and the result. Your experience may help other land trusts avoid similar situations in the future.

111 Managing a legal challenge After the Settlement or Trial

Almost all litigation is settled, but 2–8 percent of civil cases brought each year are not. Because operating a land trust is a risky business, you need to do everything you can to effectively manage the risk of a lawsuit. When the land trust is sued or must sue a landowner, you need to be prepared to respond appropriately and continue to carry on the land trust’s mission.

112 CONCLUSION

Disputes occur every day. People make mistakes. Sometimes, to uphold your conservation easements and protect your fee-owned land, education and relationship-building just isn’t enough and formal dispute resolution is necessary. Often such situations require that early on you hire an attorney who can evaluate the strengths of your case and your financial capacity and then determine the best approach to move forward. It is important to think about your goals and find a lawyer who understands your needs. Take the lessons to heart. Have you identified the types of activities that can lead to litigation and taken reasonable steps to reduce the likelihood of litigation? Also, consider whether spending money up-front to reduce disputes before they become a lawsuit is a good strategy for your land trust. Consider pooling your resources and risks with other land trusts to gain more leverage. A lawsuit is not likely to be part of your normal day-to-day activity and can seem overwhelming. Don’t expect to figure out all of the answers immediately. The legal system is constantly evolving as courts interpret the law, new laws are adopted and new legal theories come into being. Some steps need to be taken early on, such as establishing a file, defining roles and responsibilities and finding an attorney. For other steps, you will have more time to refine the goals of your land trust, to find the factual strengths of your case and ultimately the legal solution.

113 Conclusion

Remember three things:

1. Get the right assistance and have systems, policies, people and practices in place that enable you to manage the risk of a legal challenge 2. Document everything 3. Respond promptly and proportionately, commensurate with the damage on the ground and to the easement’s purposes or the conservation values of the property

Good luck!

114 Resources for Land Trust Lawyers

The Land Trust Alliance’s Conservation Defense Center provides network- ing, education and legal information to attorneys and land trusts on conservation defense. The focal point of the center is the Conservation Defense Clearinghouse [http://clearinghouse.lta.org], which has collections on qualify- ing conservation purposes explanations, law, rulings and regulations, as well as hundreds of judicial opinions on conservation cases, “Land Conservation Case Law Summaries,” compiled by Maine attorney Rob Levin—for those seeking a summary of relevant judicial authority—and a report comparing all 50 states’ easement enabling acts. In addition, the Conservation Defense Center includes:

• A forum for senior practitioners and experienced attorneys to share information • Another forum for attorneys new to conservation to network with senior practitioners and access valuable legal resources • An attorney locator database for conservation attorneys, listing attorneys by specialty and state • Legal education for attorneys and law students • Assistance to help prevent legal problems for land trusts • Outreach, tools and technical assistance for land trusts

The Alliance will continue to emphasize prevention as a tool to strengthen conservation efforts, as well as the fact that conservation defense begins with good drafting and conservation design, solid internal systems and sound land trust governance. Finally, with regard to standards, research, policy and legislation, the Alli- ance works closely with many partners to identify areas of collaboration and important trendsetting policy, legislative or regulatory needs with the hope that initial successes can be reproduced in other states. The Conservation Defense Initiative closely coordinates with other Alliance staff on overlapping issues.

115 Resources for Land Trust Lawyers

Tracking and sharing information on other emerging issues, such as amendments, condemnation, third-party trespass, best state practices and IRS challenges, is also part of the Conservation Defense Clearinghouse. Those trends may translate into appropriate action in a state where leaders feel the issue is ripe to be addressed. In summary, the goal of the Conservation Defense Center is to encourage good conservation and stewardship, prevent unnecessary litigation and, when litigation or dispute resolution is necessary, assist land trusts to achieve more favorable results. The Center helps make conservation legal expertise widely available across the country. It also gives land trusts ready access to the tools and resources necessary for conservation defense and leverages partnerships and fundraising to inspire improvements in state policy and legislation in an effort to build stronger land trusts and ensure conservation permanence. Feel free to contact the Land Trust Alliance Conservation Defense Director or Conservation Defense Coordinator to discuss issues or ideas at conserva- [email protected].

116 Additional Resources

Land Trust Alliance Websites

• Attorney Locator database [http://clearinghouse.lta.org/attorneys] • Conservation Defense Clearinghouse [http://clearinghouse.lta.org] • Conservation Defense Insurance [www.lta.org/cdinsurance] • Policy Action [www.landtrustalliance.org/policy] • Land Trust Accreditation Commission [http://landtrustaccreditation.org] • The Learning Center http://learningcenter.lta.org[ ] • Terrafirma Risk Retention Group LLC http://www.terrafirma.org[ ]

Publications

Bouplon, Renee. Conservation Easement Stewardship. [http://learningcenter. lta.org/ltalrn/stewardship/ce_stewardship_/] Washington, DC: Land Trust Alliance, 2008. Part of the Land Trust Alliance’s Standards and Prac- tices Curriculum, this book covers developing good working relationships with landowners, using baseline documentation reports and implementing annual easement monitoring, as well as evaluating capacity and using a clear stewardship philosophy. Byers, Elizabeth, and Karin Marchetti Ponte. The Conservation Easement Handbook. [http://iweb.lta.org/Purchase/ProductDetail.aspx?Product_code =CEH] Washington, DC: The Trust for Public Land and Land Trust Alli- ance, 2005. The second edition of this handbook was published in 2005 and is an invaluable addition to every land trust library. The handbook addresses easement management issues, such as creating easement programs, developing stewardship programs and managing violations and amendments, and it contains extensive guidance on drafting conservation easements. A CD with sample documents is included. Hamilton, Jane Ellen. Conservation Easement Drafting and Documentation. [http://learningcenter.lta.org/ltalrn/land_protection/drafting_and_docu mentation/] Washington, DC: Land Trust Alliance, 2008. Part of the Land Trust Alliance’s Standards and Practices Curriculum, this book covers the

117 Additional Resources

elements of conservation easement drafting, how drafting affects stewardship, litigation issues arising from poor drafting and how to document what the conservation easement conserves, as well as the link between documentation and stewardship. Herman, Melanie Lockwood. Coverage, Claims & Consequences: An Insurance Handbook for Nonprofits, 2nd edition [http://www.nonprofitrisk.org/store/ pub_detail.asp?id=39] Washington, DC: Nonprofit Risk Management Center, 2008. This book puts insurance in perspective as a risk-financing tool that is part of an overall risk management strategy. ——— Exposed: A Legal Field Guide for Nonprofit Executives. [http://www. nonprofitrisk.org/store/pub_detail.asp?id=225] Washington, DC: Nonprofit Risk Management Center, 2009. This book is a follow-up to NRMC’s work- shops and training programs for nonlawyer executives and covers a host of legal topics. Land Trust Alliance. Amending Conservation Easements: Evolving Practices and Legal Principles. [http://tlc.lta.org/library/documents/1830] Washing- ton, DC: Land Trust Alliance, 2007. This report presents an analysis of months of research and dialogue among leading attorneys, practitioners and academics on the issues of how, when and if conservation easements should be amended. Land Trust Alliance. Conservation Capacity and Enforcement Capability. [http:// tlc.lta.org/library/documents/1711] Washington, DC: Land Trust Alliance, 2007. A research study on the costs of conservation easement stewardship and conservation defense, as well as variables contributing to violations, violation frequency and litigation expenses. Liegel, Konrad. Avoiding Conflicts of Interest and Running an Ethical Land Trust. [http://learningcenter.lta.org/ltalrn/governance/land_trust_ethics/] Wash- ington, DC: Land Trust Alliance, 2006. Part of the Land Trust Alliance’s Standards and Practices Curriculum, this book discusses how to manage conflicts of interest and transactions with insiders according to the highest ethical standards. Lindstrom, C. Timothy. A Tax Guide to Conservation Easements. Washing- ton, DC: Island Press, 2008. [http://www.amazon.com/Tax-Guide-Conser

118 Additional Resources

vation-Easements/dp/1597263885/] This comprehensive book by land use attorney C. Timothy Lindstrom covers the tax benefits of a charitable contribution or bargain sale of a conservation easement. It provides a detailed explanation of the complex and extensive requirements of the federal tax code and related concepts, including the rules governing the operation of tax-exempt organizations such as land trusts. Nonprofit Risk Management Center. “Communicating with Key Constituen- cies During a Lawsuit.” [www.nonprofitrisk.org/library/articles/legal09001 998.shtml] Ratley-Beach, Leslie. Managing Conservation Easements in Perpetuity. [http:// learningcenter.lta.org/ltalrn/stewardship/managing_ces_in_perpetuity/] Washington, DC: Land Trust Alliance, 2009. Part of the Land Trust Alli- ance’s Standards and Practices Curriculum, this book offers strategies for managing change more effectively so your conservation easements will still be here tomorrow. Distinguish between easement defense and enforcement, develop a system to educate landowners and take the first steps in drafting an enforcement policy to safeguard what you have worked so hard to protect. Small, Stephen J. The Federal Tax Law of Conservation Easements, 2nd edition. [http://iweb.lta.org/Purchase/ProductDetail.aspx?Product_code=FTL] Washington, DC: Land Trust Alliance, 1990. This authoritative legal volume interprets the IRS regulations on gifts of conservation easements and discusses related income and estate tax considerations. The Third Supplement updates the volume by discussing cases and letter rulings through 2000. Standards and Practices Curriculum. [http://learningcenter.lta.org/ltalrn/?page _num=1&portal_id=1003] The 18 books that make up the Standards and Practices Curriculum are written by top conservation experts and are available online or in print, by ordering directly from the Alliance [http://www .landtrustalliance.org/training/publications/curriculum]. They are also offered via in-person training events sponsored by the Alliance or its partners.

Organizations

• Alliance of Nonprofits for Insurance Risk Retention Group. http://www.ani-[ rrg.org/index.cfm] Offers a variety of risk management tools and assistance.

119 Additional Resources

• Center for Natural Lands Management. [http://www.cnlm.org] Property Analysis Record (PAR) model for stewardship funding calculation. • Independent Sector. [http://www.IndependentSector.org] Good information for nonprofits, including a Code of Ethics and Guide to the Sarbanes- Oxley Act. • LandScope America. [http://www.landscope.org] A collaborative project of NatureServe and the National Geographic Society. An online resource for the land protection community and the public. • Land Trust GIS. [http://www.landtrustGIS.org] A web resource for geographic information systems mapping and analysis tool for land conservation. • Nonprofit Risk Management Center. http://www.nonprofitrisk.org/ [ ] A wide variety of electronic and paper risk management advice and training. Free telephone and e-mail assistance also available. • Private Landowner Network. “Legal Defense and Enforcement of Conser- vation Easements” [http://www.privatelandownernetwork.org/library/ article.aspx?id=202] Jessica E. Jay, Esq., is an excellent overview of risk analysis and various insurance market potential resources. • Wise Giving Alliance. Better Business Bureau [http://www.bbb.org/us/ charity/] publishes standards for charity accountability.

120 Glossary

501(c)(3): Tax-exempt organizations described in section 501(c)(3) of the Inter- nal Revenue Code and commonly referred to as charitable organizations. These groups are eligible to receive tax-deductible contributions. They must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of their earnings may inure to any private share- holder or individual. Access: The right to enter and leave a tract of land from a public way. Can include the right to enter and leave over the lands of another. Alternative dispute resolution: The process for disagreeing parties to obtain third- party help in reaching an agreement without litigation. Mediation and the more formal arbitration and government enforcement are examples of alternative dispute resolution. Answer: A document responding to the allegations in the plaintiff’s complaint. Arbitration: The referral of a dispute to an impartial third person chosen by the parties to a dispute who agree in advance to be bound by the arbitrator’s decision issued after a formal hearing. Arbitration is different from the informal and nonbinding process of mediation. Attractive nuisance doctrine: A landowner may be held liable for injuries to children trespassing on the land if the injury is caused by a hazardous object or condition on the land that is likely to attract children (such as a rope swing or swimming pool) who are unable to appreciate the risk posed by the object or condition. Baseline documentation report: A record of the conservation values identified in the easement and the relevant conditions of the property used to monitor and enforce the easement. It contains maps, photographs and text and is signed by the landowner and land trust at or before closing. Brownfield: Real property, the expansion, redevelopment or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.

121 Glossary

Charitable trust doctrine: When a gift is made to a charitable organization to be used for a specific charitable purpose, the organization may not deviate from the charitable purposes of the gift without receiving judicial approval unless the instrument conveying the gift specifically permits the deviation. This principle holds true whether the donor is treated as having created a charitable trust or as merely having made a restricted charitable gift under state law. Color of title: The appearance of having title to personal or real property by some evidence, but in reality there is either no title or a vital defect in the title. Common law: Law developed by judges through decisions of courts and similar tribunals, rather than through legislative statutes or action by the executive branch. Competency: The American Bar Association requires that a lawyer has the legal knowledge, skill, thoroughness and preparation reasonably necessary for engagement with the client. Complaint: A document sent to the court and the defendant that lists the plaintiff’s basis for the lawsuit (including “claims” or “allegations”). Condemnation: A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner. Conflict of interest: A conflict of interest arises when a person in a position of authority in an organization, such as a director, officer, manager, or other “insider,” is in a position, or perceived to be in a position, to be able to benefit personally (or create a benefit to a family member or other organization with which they are associated) from a decision he or she could make. Conservation easement: A legal agreement between a landowner and a qualified organization that restricts future activities on the land to protect its conservation values. A conservation easement may be known as a conservation servitude or conservation restriction, depending on state law. Conservation easement monitoring or annual visit: The land trust’s ongoing inspection of land to determine compliance with the easement, visit with the landowner and document the organization’s findings. Monitoring ensures the protection of the land’s conservation values over time.

122 Glossary

Conservation purposes: One of the four conservation purposes set forth in §170(h) of the Internal Revenue Code, as further defined in §1.170A-14(d) of the Treasury Regulations. 1. The preservation of land areas for outdoor recreation by, or the education of, the general public; 2. The protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem; 3. The preservation of open space (including farmland and forest land) where such preservation is: a. for the scenic enjoyment of the general public; or b. pursuant to a clearly delineated Federal, State, or local governmental conservation policy, and c. will yield a significant public benefit; or 4. The preservation of an historically important land area or a certified historic structure. Conservation values: The key values on a site that are the focus of protection efforts. Important conservation values are determined during property evaluation and project planning. Contract: A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. Deed: A legal document by which ownership to land and interests in land are transferred. Defendant: The party receiving the summons and answering the complaint. For example, the land trust is a defendant if landowners bring a suit against a land trust if they disagree with its interpretation of an easement. Defense within limits: Directors and officers insurance policies terms, which hold that all defense costs incurred by the carrier in defending the insured against a claim under the policy reduce the policy’s coverage limits. The insured must pay the litigation fees until the amount of the self-insured retention is exhausted. Deposition: The oral questioning of experts and other witnesses under oath. Disclosure: The release of information about a person or entity. Discovery: The court-required process used by each party to a lawsuit to obtain from the other party any relevant facts, information, documents, statements,

123 Glossary

images and other material about the case to assist with each party’s trial preparation. Diverse citizenship: When the party on one side of a lawsuit is a citizen of one state or nation and the party on the other side is a citizen of another state or nation. Due diligence: The steps that a party contemplating the acquisition of an interest in real property takes to understand matters of record that may affect a piece of property, or other matters that may affect the decision to acquire the real property interest. Due diligence is a broad term and refers to the examination of the title to the property and any exceptions to title (such as easements granting rights to third parties to use the land or the lack of access to a public road), the examination of the land for hazardous materials, research into the availabil- ity of utilities, research into the nature of water or mineral rights ownership, research into land use or other laws that may affect the use of the property, etc. Duty to defend: An insurance policy clause that states that in the event you have a claim against you for an alleged wrongful act, the insurance company providing coverage at the time has the right and duty to defend the claim, even if it is groundless, false or fraudulent. Easement: A right to use the land of another for a specific purpose, such as for a right-of-way or utilities installation and maintenance. Easement enforcement (or defense): Actions taken by a land trust to uphold the easement when an easement is violated, including, for example, legal action and restoration of conservation values. Eminent domain: The right of a government and certain quasi-public bodies (for example, utilities) to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner. Encroachment: A building, other improvement or some portion of it—a wall or fence, for instance—that extends beyond the land of one owner and intrudes on land of an adjoining owner. Encumbrance: Anything that may diminish the value or use and enjoyment of a property, such as a mortgage, tax or judgment lien, an easement or a restriction on the use of the land.

124 Glossary

Estoppel: A legal term meaning that a person is precluded from complaining against a circumstance that he or she caused or contributed to, by either his or her silence, acquiescence or affirmative approval. Fee lands: Properties that are owned outright by the land trust. This is alterna- tively known as fee simple ownership. General liability insurance: A type of insurance that covers lawsuits against the land trust for negligence. Governance: The fundamental decisions and authority that defines an organization and its work. Governance includes five major elements: direction and outcome, rules and guidelines, capacity and resource development, leader- ship and personnel, and implementation and results. Grantee: A person who receives a conveyance of real property from a grantor. Grantor: The person transferring title to or an interest in real property to a grantee. Gross negligence: A willful, wanton, reckless or intentional disregard for safety. Hearsay: A statement made (or a document offered) in court that is based on the statement made by another who is not under oath or in court and that is offered to prove the truth of the matter stated. While hearsay evidence is not generally admissible to prove the truth of the statement, there are exceptions that allow the evidence if there is support for its authenticity. Important conservation values: See conservation values. Improvement: (1) Any structure, usually privately owned, erected on a site to enhance the value of the property (for example, a building or driveway). (2) A publicly owned structure added to or benefitting land, such as a curb, sidewalk, street or sewer. Indemnify: To make payment for a loss. Injunction: An equitable remedy granted by a court in a lawsuit that prohibits another party to a lawsuit from acting in a manner detrimental to the other party’s interests until the matter can be resolved before the judge. Usually the action must be of a nature that is immediate, substantial and irrepa- rable or if not stopped would result in extensive losses to the other party if compelled to return to the condition preceding the adverse action.

125 Glossary

Insiders: Board and staff members, substantial contributors, parties related to the above, those who have an ability to influence decisions of the organization, and those with access to information not available to the general public. The IRS generally considers “insiders” or disqualified persons under IRC Section 4958 to be persons who, at any time during the five-year period ending on the date of the transaction in question, were in a position to exercise substantial influence over the affairs of the organization. Insiders generally include: board members, key staff, substantial contributors [see IRC Section 507(d) (2)], parties related to the above and 35 percent controlled entities. While these are strict definitions within the tax code, land trusts are advised to take an even more proactive approach to the potential damage that conflicts of interest may cause an organization and to also include in the definition of insiders all staff members and those with access to information not available to the general public (such as certain volunteers). Related parties is defined by the IRS to include spouse, brothers and sisters, spouses of brothers and sisters, ancestors, children, grandchildren, great-grandchildren, and spouses of children, grandchildren and great-grandchildren. Integrative bargaining: A negotiation strategy in which parties collaborate to find a “win-win” solution to their dispute. Interrogatories: A formal set of written questions provided by one party to the other, required to be answered in writing and under oath. IRS Form 8283 Noncash Charitable Contributions: A donor must attach Form 8283 to an income tax return to claim a deduction for a gift of a conservation easement or land valued more than $500. The 8283 will also need to be signed by the land trust accepting the gift. Judgment: The formal decision of a court upon the respective rights and claims of the parties to an action or suit. After a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant. Laches: The failure to do a thing at the proper time, especially such delay as will bar a party from bringing a legal proceeding. Land Trust Standards and Practices: The ethical and technical guidelines for the responsible operation of a land trust adopted by the Land Trust Alliance in 2004.

126 Glossary

Legal defense reserve (also known as enforcement fund): A separate, dedicated fund established by a land trust to support the costs of legal defense of its easements and/or fee properties. Usually both principal and interest may be withdrawn if needed. Usually these funds are in addition to a dedicated stewardship fund or endowment and would be used only when major, expensive enforcement actions are required. Lien: A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale. Litigation: The process of taking a dispute to court when all else fails. Material fact: A fact that would be to a reasonable person germane to the decision to be made, as distinguished from an insignificant, trivial or unimportant detail. Mediation: The act of an impartial third person negotiating between two or more contenders with a view to persuade them to settle their dispute or to discover by an interactive process of conversation and negotiation a mutually acceptable solution to their dispute. This procedure is different than the formal and binding process of arbitration. Motion: A procedural device to bring a limited, contested issue before a court for a decision. Objection: A formal protest asking the judge to prevent your opponent from presenting certain evidence that your lawyer believes is inadmissible under the rules of evidence for that court’s jurisdiction. Plaintiff: The party that initiates the lawsuit and files the complaint. For example, the land trust is a plaintiff when the land trust sues a landowner to obtain a remedy for a conservation easement violation. Pleadings: A formal written statement, other than a motion, filed with a court by parties in a civil action. Policy: A written, board-adopted document specifying a course of action to guide and determine present and future decisions. There are three general types of policies: • Governing policies (defining broad direction and organizational framework, including strategic plans and bylaws)

127 Glossary

• Executive policies (defining the program and organizational guidelines or constraints for how business will be conducted) • Operational or administrative policies (defining the procedures and details for organizational operations) Privileged information: Information held strictly between the attorney and the client. Procedure: A series of steps followed in a regular order. In this context, procedures are written for staff and/or volunteers to follow and may or may not be approved by the board. Protective order: A court order, direction, decree or demand to protect a person from further harassment, service of process or discovery. Public trust doctrine: A legal doctrine referring to the obligation to benefit the general public over the interests of a private individual or entity. Qualified conservation contribution: A charitable donation that satisfies §170(h) of the Internal Revenue Code. Real property: The interests, benefits and rights inherent in real estate ownership; land, together with fixtures, improvements and appurtenances; also referred to as realty. Recording: The act of entering or recording documents affecting or conveying interests in real estate in the recorder’s office established in each county or jurisdiction. Records: A land trust’s records are any documents, records or data in any format that it uses in conducting its business, including: paper records—such as documents, letters, memoranda, reports and notes; photographs—including nega- tives or digital discs; maps; computer records and files; e-mails; and voice mails. Records policy: A written, board-approved policy that governs how organization and transaction records are created, collected, retained, stored and disposed. Release: The relinquishment, abandonment, concession or giving up of a right, claim or privilege by the person in whom it exists or to whom it accrues. Relevance: The tendency of a given item of evidence to prove or disprove one of the legal elements of the case. Reserved rights: The rights to use or develop the property reserved by the landowner under the terms of the conservation easement. The term can also include a

128 Glossary

reference to activities permitted on a property, and to the rights reserved to use the land for agricultural, forestry, or other working lands purposes. Retainer: A lump-sum advanced fee for services. Right of first refusal:The right to purchase property on the same terms and conditions of an offer to purchase the property made by a third party. Risk: A situation involving exposure to danger. Risk tolerance: The capacity to accept or absorb risk. Sarbanes-Oxley: A federal law passed in 2002 that created a new set of regulations for publicly traded corporations and enhanced penalties for those inter- fering with the investigation of improper practices. Serve: To deliver a legal document, especially a process or notice; to present a legal notice or subpoena to a person as required by law. Standing: The right of a person to participate in a judicial proceeding and be recognized as a party to the proceeding by the court and the other parties. Statute of limitations: The maximum period of time after an event that one can initiate legal proceedings. Stewardship: 1. Those steps necessary to uphold a conservation easement in perpetuity, including the creation of baseline documentation, regular monitoring, maintaining landowner relations—including successor generation landowners, addressing amendments and enforcing easements; or 2. Those steps necessary to undertake the many responsibilities of managing a fee-owned property in perpetuity. Successor landowner or successor generation landowner: An owner who acquired protected property and was not the original grantor of the conservation easement. Summons: A formal notice of the suit, which includes the complaint and tells the defendant who is suing, why the suit has been brought and by when the defendant must respond to the complaint. Third-party enforcer: A person or entity who is not named as a holder of a conservation easement but who nonetheless has the legal right to independently enforce a conservation easement. In some states, the Attorney General may be a third-party enforcer.

129 Glossary

Third-party violator: A person or entity who is not the owner of the easement- protected property who enters the land without the knowledge or permission of the landowner and violates the conservation easement. Title: (1) The right to or ownership of land. (2) The evidence of ownership of land. Title insurance: A policy insuring the owner against loss by reason of defects in the title to a parcel of real estate, other than encumbrance, defects and matters specifically excluded by the policy. Tortious interference: When one party convinces another party to breach a contract or disrupts the ability of a party to perform his or her obligations under the contract. Treasury Regulations: The regulations adopted by the Secretary of the Treasury that expand upon the provisions of the Internal Revenue Code, in particular with regard to qualified conservation contributions, qualified appraisers and qualified appraisals. Voluntary dispute resolution: Parties to a dispute work together to sort out their disagreement, rather than ask a third party to decide the winner and the loser. Education and negotiation are the two major types of voluntary dispute resolution techniques. Waiver: The intentional or voluntary relinquishment of a known right or dispensing with the performance of something to which one is entitled from another. Waiver is different than estoppel. Estoppel can be unintentional. Warranty: A promise by the grantor of real property that he, she or it is the owner and will be responsible to the buyer if the title is other than as represented. Will: A written document, properly witnessed, providing for the transfer of title to property owned by the deceased, called the testator.

130